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(Bloomberg) -- A Brookfield Asset Management Inc.-led consortium agreed terms on a A$18.7 billion ($12.4 billion) deal, including debt, to acquire Australian utility Origin Energy Ltd. after months of delays. The consortium, which includes EIG Global Energy Partners, increased the value of its proposal following further talks in recent weeks and the pact will value Origin’s shares at A$8.912 each, the target said Monday in a filing. The announcement confirms an earlier Bloomberg News report that the parties planned to complete the deal within days. Adding Origin allows Brookfield to add further exposure to the shift away from fossil fuels in Australia, where utilities are accelerating plans to shutter coal plants and expand in renewables. “As the energy transition gathers pace, what’s needed is increasingly clear: faster deployment of large-scale renewables, the accelerated, responsible retirement of coal generation, and an interim, supportive role for gas as the dependable back-up fuel,” Brookfield’s Head of Transition Investing Mark Carney said in a separate statement. Sydney-based Origin’s board has unanimously recommended the proposal and is targeting completion in early 2024, bringing to a close a pursuit that had been cast into doubt by market turmoil and moves by Australia’s government to cap domestic natural gas prices. The consortium had last month lowered its original offer, and the new proposal is at an about 9% premium to Monday’s closing share price. “The transaction represents a significant premium to the share price prior to the original indicative proposal, and reflects the strategic nature of Origin’s platform, its growth prospects and anticipated earnings recovery,” Origin Chairman Scott Perkins said in the statement. Origin will be broken up under the plans, with EIG taking the LNG unit, one of Asia’s largest. Meanwhile, Brookfield plans to invest to decarbonize Origin’s large utility and generation business, which serves more than 4.5 million homes and businesses, and currently operates Australia’s biggest coal plant. Under terms of the new proposal, a plan to offer a split payment will be extended to all shareholders and include a component in US dollars to account for the company’s 27.5% stake in the Australia Pacific LNG joint venture with ConocoPhillips and Sinopec. EIG’s MidOcean Energy will sell a further 2.49% stake in the LNG unit to ConocoPhillips following completion of the takeover, Origin said in the Monday statement. Other members of the Brookfield consortium include GIC Pte Ltd. and Temasek Holdings Pte, Origin said in the statement. (Updates with Origin statement)

Brookfield, EIG Near $10.2 Billion Takeover of Origin

02/21/2023 | 09:38pm GMT
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By David Winning
SYDNEY--Origin Energy Ltd. said a consortium seeking to acquire the business has reduced the value of its indicative offer to 8.90 Australian dollars (US$6.10) a share, the latest twist in long-running takeover talks. The revised offer from the consortium comprising Brookfield and the LNG arm of private-equity firm EIG Global Energy Partners is lower than the A$9.00/share proposed late last year. Still, Origin said the latest proposal "has the potential to deliver significant value to shareholders, and accordingly, intends to continue to progress discussions with the Consortium, including the negotiation of a Scheme Implementation Deed, while assessing the execution considerations and risks associated with the revised proposal." Origin is a major shareholder in the Australia Pacific LNG plant in eastern Australia's Queensland state that supplies liquefied natural gas to Asia. The facility is operated by ConocoPhillips and has benefited from elevated prices of LNG after Russia's invasion of Ukraine led countries in Europe to scour the world for alternative sources to Russian supply. Origin also owns some power plants and is one of Australia's biggest retailers of electricity and gas to households and businesses. It has said it will stop exploring for oil and natural gas in landholdings that don't support the Australia Pacific LNG facility as it prepares to invest more in clean energy. If successful, the bid consortium plans to break Origin up. Brookfield would acquire Origin's Energy Markets business, which generates electricity for sale to customers along with some gas supply. MidOcean Energy, the EIG unit, would own Origin's Integrated Gas business, which includes its 27.5% interest in the Australia Pacific LNG project. Last year, Origin agreed to sell a 10% stake in the Australia Pacific LNG project to EIG for 2.12 billion Australian dollars, but the deal didn't proceed because ConocoPhillips exercised its pre-emption rights to acquire the interest instead. Write to David Winning at david.winning@wsj.com
(END) Dow Jones Newswires

Origin to Continue Talks With Bid Consortium Despite Reduced Proposal

02/15/2023 | 04:58pm EST
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By David Winning
SYDNEY--Origin Energy Ltd. said buoyant prices of liquefied natural gas had helped it to return to a half-year profit as it continues to engage a consortium that wants to acquire the business. Origin reported a net profit of 399 million Australian dollars (US$276.5 million) for the six months through December, recovering from a loss of A$131 million a year ago. Revenue rose by 35% to A$8.76 billion. Directors of the company declared an interim dividend of 16.5 Australian cents a share, up from 12.5 cents a year earlier. Russia's war with Ukraine has stoked demand for liquefied natural gas around the world, including from the Australia Pacific LNG project that Origin owns with ConocoPhillips and China Petrochemical Corp. In the first six months of the fiscal year, APLNG's revenue was 51% higher than a year earlier, mainly reflecting higher realized oil prices. Still, APLNG's ability to capture this tailwind from strong LNG markets has been hampered by wet weather. The facility's production fell by 5% in the half-year period, although Origin said recently that a plan is in place to recover lost production in the second half of its fiscal year. Origin's Energy Markets business has also fared better than many investors were expecting as recently as the start of January. The division's underlying earnings before interest, tax, depreciation and amortization in the six months through December declined to A$148 million, from A$268 million a year ago. On Jan. 27, Origin upgraded its underlying Ebitda guidance for the Energy Markets business to A$600 million-A$730 million, from a prior range of A$500 million-A$650 million, citing a good operating and trading performance as well as improved coal delivery under legacy contracts. On Thursday, Origin said it now expects Energy Markets underlying Ebit to be toward the higher end of the A$600 million-A$730 million range. Origin became a takeover target in November when a consortium comprising Brookfield Asset Management Inc. and the LNG arm of private-equity firm EIG Global Energy Partners proposed a takeover worth A$9.00 a share in cash. When disclosing the approach, Origin said it intended to recommend that shareholders vote in favor of a deal, if the consortium makes a formal bid. On Thursday, Origin said the consortium has substantially completed due diligence "and active engagement continues on a non-exclusive basis in relation to the submission of a binding proposal." Takeover talks are taking place against a backdrop of energy policy shifts. The Australian government has put forward new policies aimed at containing increases in energy prices at a time when households are feeling broader cost-of-living pressures, including through higher interest rates. Among the government's interventions is a 1-year price cap on natural gas supply along Australia's east coast. In a research note this month, Morgan Stanley analysts said it didn't view the policy changes as a material incremental headwind for valuing Origin and rival AGL Energy Ltd., noting they would help to shore up fuel supplies for the companies as well. If successful, the bid consortium plans to break Origin up. Brookfield would acquire Origin's Energy Markets business, which generates electricity for sale to customers along with some gas supply. MidOcean Energy, the EIG unit, would own Origin's Integrated Gas business, which includes its 27.5% interest in the Australia Pacific LNG project. Last year, Origin agreed to sell a 10% stake in the Australia Pacific LNG project to EIG for 2.12 billion Australian dollars, but the deal didn't proceed because ConocoPhillips exercised its pre-emption rights to acquire the interest instead. Write to David Winning at david.winning@wsj.com
(END) Dow Jones Newswires

Origin Returns to 1st Half Profit, Takeover Talks Ongoing -- Update

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Washington| The private equity suitor behind an $18.4 billion bid for Origin Energy says it is willing to ignore government threats of export controls and price caps and invest in Australia for the next 20 years because it believes the nation’s gas resources will play a crucial role in the transition to clean energy. Blair Thomas, chairman of the Washington-based EIG Global Energy Partners, said investors need to be more wary than ever of creeping intervention by governments. However, he says Australia is no different to the rest of the world and he is ready to commit to investing here for at least 20 years. EIG joined Canada’s Brookfield Asset Management in launching the surprise bid on Thursday morning. Brookfield says it wan ts to invest $20 billion to accelerate Origin’s decarbonisation in the current decade. Mr Thomas told The Australian Financial Review that the world’s energy markets would be unrecognisable within a decade and cautioned environmentalists and governments that volatility in prices would hamper their decarbonisation efforts. Blair Thomas of private equity firm EIG is betting big on the role of gas in the energy transition. EIG, which has invested $US41.5 billion ($62 billion) in global energy – including Aramco’s oil pipelines, which carry one in eight barrels of the world’s daily oil consumption – is using a strengthening US dollar as a motivation to jump into the Australia market. But Mr Thomas said the group would remain disciplined on pricing assets and would steer away from development projects due to their lack of financial support. Advertisement
“We’re long-term believers in Australia, or we wouldn’t be pursuing this transaction,” Mr Thomas said. “We’re making a 20-year bet here on this strategy. The [political and regulatory] pressures, certainly, they’re prevalent in Australia right now. But we’re really seeing them around the world. “It does make it challenging and tricky from an investment standpoint, and you do need to keep an eye on the regulatory environment, the fiscal environment and political risk more than you historically would have, but that’s a phenomenon that’s happening around the world.”
Last month, Treasurer Jim Chalmers added to his recent regulation in the gas markets by confirming his Treasury department would look at potentially taxing energy giants tens of billions of dollars extra a year via changes to the petroleum resource rent tax (PRRT) . However, Mr Thomas noted that EIG – which celebrated its 40th anniversary last year as a specialist energy investor – was an investor in the UK, where a windfall profit tax had been enacted, and was also an investor in Germany, where market interventions had been made. While comfortable with the regulatory settings, he warned environmental groups and governments to be careful about creating too much disruption to markets. “People need to recognise that this is a transition and that gas is the key fuel to make it happen. So it’s in everybody’s interest that we provide security and price stability – otherwise, there’s a real risk that the public turns on decarbonisation, and then we’re all losers.”
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“So even the most fervent environmentalists should recognise that price stability is in their interest,” he said. EIG and Canadian bid partner Brookfield Asset Management’s top-shelf $9-a-share bid for Origin was immediately labelled a “knockout” by analysts and won a provisional nod from the company’s board. The parties will conduct due diligence over eight weeks. The US dollar, which has risen 14 per cent against the Australian dollar since March, has created a good opportunity to secure Australian assets, Mr Thomas said. “I’d be lying if I didn’t say that that foreign exchange rates didn’t factor into our thinking.”
But that was no excuse to be ill disciplined on pricing for Origin Energy, where EIG has already revised its bid twice. Treasurer Jim Chalmers says there’s  a public appetite for changes to petroleum taxation that would raise more money. AP, Alex Ellinghausen
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EIG-backed Harbour Energy, which Mr Thomas also chairs, left Australia empty-handed in 2018 after a year of chasing the gas assets of producer Santos . Harbour was forced to bid against itself five times, including twice over one weekend, leaving Mr Thomas infuriated, saying there was an “unwillingness” by Santos’ board and “no meaningful attempt by Santos to discuss a realistic price”. While the Origin Board has given a provisional approval for EIG’s latest bid, Mr Thomas told the Financial Review the private equity giant would remain firm on pricing. “At the end of the day you never sacrifice discipline. The Santos transaction was part of this same strategy, the same belief in the role of LNG, and from that standpoint, this [deal] is a continuation of that.”
“We have high conviction about Australia and the role that Australia plays in a broader global strategy. And yes, we want to win.”
The attraction for EIG to Origin is that the assets are operational, not in development stage, and therefore have strong long-term customer contracts and lower risk. “The bigger issue from my standpoint is most people don’t know what the energy landscape is going to look like 20 years from now. Advertisement
“So that’s part of the reason why I think [development projects] are struggling to get financed. I have not seen that with respect to operating assets.”
Major banks around the world have been pulling finance for some fossil fuel development projects, most notably in coal and to a lesser extent oil, but Mr Thomas saw no signs of that for gas as yet. “I do believe the market makes a big distinction between natural gas and coal, and to a lesser extent, oil. And so you know, on that continuum of public pushback, to be honest with you, we’re really not seeing it on gas yet.”
The private equity group, which usually holds investments for seven years before on-selling them, is looking for a longer-term play in Origin’s assets. “If it’s something that goes in one of our funds, it’s typically in that seven- to eight-year timeframe. That’s not what we’re doing here. “We formed a new company, MidOcean, and that company is perpetual. So there’s no defined exit timeframe on this. Ultimately, we’re going to build MidOcean into a big company and then in all likelihood we will list that somewhere.”
Matthew Cranston is the United States correspondent, based in Washington. He was previously the Economics correspondent and Property editor. Connect with Matthew on Twitter . Email Matthew at mcranston@afr.com
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Origin Energy bidder EIG not fazed by gas threats

09/07/2022 | 05:39am EDT
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Watch For:
Trade data for July; EIA Weekly Petroleum Status Report; Canada Trade data for July; Bank of Canada interest rate decision; Apple new iPhone model presentations
Opening Call:
Stock futures were steady early Wednesday, although investor sentiment remained under pressure from multiple macro factors. Stocks remained vulnerable to what would be the fourth straight week of losses if a turnaround fails by Friday. September has a reputation as the worst month of the year for stocks, and so far post-Labor Day trading has been far from upbeat. "With different asset classes swinging between gains and losses over the last 24 hours, it's been difficult to point to a single factor behind the various moves," said Jim Reid, a strategist at Deutsche Bank. "Investors remain cautious about the growing array of risks on the horizon, ranging from the European energy situation to Chinese lockdowns to hawkish central banks." Adding pressure to investor sentiment Wednesday was poor trade data out of China, raising worries about weakening global demand and a slowdown in the world's second-largest economy. Exports grew 7.1% year over year in August, below the 13% expected and the 18% notched in July. Imports rose just 0.3%, below expectations of 1.1%. "This morning's latest trade numbers for August merely serve to underscore how weak domestic demand still is, and how far away that end of year GDP target of 5.5% is," said Michael Hewson, an analyst at broker CMC Markets. "It's further away than ever after today's data and we could be lucky to see half that number at this rate...It's hard to see a scenario for a significant economic pickup much before next year." Overseas, the pan-European Stoxx 600 fell 0.6% as worries around a regional energy crisis remained salient in the wake of Russia's halt to natural-gas flows in the Nord Stream 1 pipeline. Hong Kong's Hang Seng Index retreated 0.9% in the wake of the weak trade data out of China. Stocks to Watch:
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Oil prices were down around 1.4% in Europe, with Brent at a seven-month low, as fears about global demand continued to drag on sentiment. Chinese import data is adding to a weak picture. The nation's oil imports recovered month-on-month but were down more than 9% on year. "The downside pressure is explained by the growing fear of recession," Swissquote Bank said. Metals:
Base metals were lower in early London trade, pulled down by weak demand and fears over slowing global growth. Chinese construction should be a key watchpoint currently in terms of base demand as we are in the usual peak demand season currently, but base demand still remains weak in Asia, Marex said. "Also, we do have waning demand not just within China but on a global scale, as recession fears continue to be present as analysts everywhere continue to talk about how the economies worldwide are slowing down." Other News:
Cobalt sulfate prices are likely to remain high over the next two to three years on strong demand from the battery sector, Fitch said, largely due to growth in the electrical vehicle sector. Sulfate prices are currently around $8,597 a metric ton, down from $19,865 a ton in April, with firms looking to cut cobalt usage within battery cells due to cost, Fitch added. However, strong Chinese demand should help to negate further falls in the country's new energy vehicle sector. That said, moving past the three year mark, prices are likely to ease as additional supply comes to market, Fitch said. TODAY'S TOP HEADLINES
Samsung Expects Sharp Downturn in Chip Sales to Extend Into Next Year
PYEONGTAEK, South Korea-Samsung Electronics Co. sees the sharp downturn in chip sales extending into next year, the latest note of pessimism for a semiconductor industry reeling from a dramatic pullback in sales of PCs, smartphones and data servers. "The second half of this year looks bad, and as of now, next year doesn't really seem to show a clear momentum for much improvement," said Kyung Kye-hyun, who heads Samsung's semiconductors unit and serves as the company's co-CEO, at a Wednesday media briefing. SEC Warns Chinese Companies About Risks of Auditor Changes
The Securities and Exchange Commission on Tuesday warned Chinese companies not to violate legal and audit requirements as they switch to auditors based in the U.S. to comply with a law that threatens to delist the businesses from American stock exchanges. More than 200 U.S.-listed Chinese companies are in danger of being booted off U.S. stock exchanges starting in early 2024 under the Holding Foreign Companies Accountable Act of 2020. It prohibits trading in companies whose auditors cannot be inspected by the Public Company Accounting Oversight Board-the U.S. audit watchdog overseen by the SEC-for three consecutive years. Repsol to Sell 25% Stake in Upstream Business to EIG for $4.8 Bln
Repsol SA will sell a 25% stake in its upstream business to U.S. institutional investor EIG Global Energy Partners for a total consideration of $4.8 billion, the Spanish energy company said Wednesday. The deal values the business at $19 billion and will allow Repsol to remain a majority shareholder and to consolidate the business within the wider group, the company said. Anti-ESG Activist Investor Urges Chevron to Increase Oil Production
A conservative activist turned investor who has criticized Wall Street's efforts to address climate change and other issues is publicly urging Chevron Corp. to pump more fossil fuels over the next decade. Vivek Ramaswamy, who launched an energy-focused exchange-traded fund nearly a month ago, is among the most prominent critics of so-called environmental, social and governance-or ESG-investing. He quickly turned his sights on Chevron, arguing the country's second-biggest fossil-fuel company should slow spending on its energy-transition plan, which he said was partially motivated by pressure from top shareholders such as BlackRock Inc.
Exports, the Engine of China's Slowing Economy, Are Sputtering
HONG KONG-The export boom that has powered China's economy through the pandemic decelerated in August, reflecting the impact from rising inflation and slowing growth elsewhere in the world. The larger-than-expected slowdown in export growth is raising fears that the engine of the world's second-largest economy is sputtering, as fresh Covid lockdowns in major Chinese cities are further restraining spending and the world economy edges closer to recession. Ukraine Seeks Corridor to Evacuate Civilians Near Zaporizhzhia Nuclear Plant
Scores of people were trying to evacuate from villages near the Zaporizhzhia nuclear-power plant, Ukrainian officials said, as an explosion cut off access to electricity and water at a nearby town. Electricity and water supplies in Enerhodar, Ukraine, were stopped after residents reported a powerful explosion Tuesday that shook the town, said Mayor Dmytro Orlov. Ukrainian Deputy Prime Minister Iryna Vereshchuk appealed for Russia to allow civilians from the area-which is controlled by Russian forces-to cross into Ukrainian-held territory. Chile Adds More Centrists to Cabinet After New Constitution Rejected
Chilean President Gabriel Boric appointed more centrist cabinet ministers Tuesday after voters overwhelmingly rejected a new constitution that would have constrained the country's market-based economy and led to other changes long sought by his political base. With students angry about the outcome of the referendum on the constitution demonstrating near the doorstep of the presidential palace, Mr. Boric gave a speech in which he said that replacing the cabinet was imperative to reflecting the message that Chilean voters delivered Sunday. In a lopsided vote that polls hadn't predicted, 62% of voters opposed a proposed constitution drafted by a constituent assembly largely made up of leftist activists. DOJ Considers Next Move After Judge Greenlights Trump's Request for Special Master
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09-07-22 0538ET

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Saudi Aramco produces, manufactures, markets, and ships crude oil, natural gas, and petroleum products. It is the national oil company, of Saudi Arabia and holds the exclusive right to explore for, produce and refine the country's hydrocarbons. The company was founded in 1933 and is based in Dhahran, Saudi Arabia.

Saudi Aramco

Aramco Corporate Development senior vice-president Abdulaziz Al Gudaimi said : `` This MoU further strengthens our relationship with EIG Global Energy Partners and has potential to drive new investment towards low emission energy solutions , which both support economic growth and contribute to the broader energy transition . ''

EIG extend energy partnership with Saudi Aramco

Fluxys is a gas infrastructure company that supplies and manages liquefied natural gas terminals. It focuses on building and operating natural gas infrastructures such as pipelines, storage facilities, and liquefied natural gas terminals. The company specializes in transmission, LNG terminalling, storage, hydrogen and carbon transmission, and terminalling. Fluxys company was founded in 2001 and is based in Brussels, Belgium.

Fluxys

FS Investments, formerly Franklin Square Capital Partners, is a manager of alternative investment funds designed to enhance investors' portfolios by providing access to asset classes, strategies, and asset managers that typically have been available to only the largest institutional investors. The company was founded in 2007 and is based in Kansas City, Missouri.

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EIG Global Energy Partners specializes in private investments in energy and has investment professionals solely dedicated to the sector, many with industry or technical backgrounds. Its clients include many of the leading pension plans, insurance companies, endowments, foundations, and sovereign wealth funds in the US, Asia and Europe. The company was founded in 1982 and is based in Houston, Texas.

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