Approvals and price caps seen as top risks for original $18 billion takeover bid

The ACCC said it was contacted by Brookfield, EIG and Origin.


“We expect a timely submission, but expect to conduct a public review where we will carefully consider any likely competitive impact resulting from the proposed transaction,” an ACCC spokesperson said.

While some observers see FIRB approval as “less problematic” because the two bidders are well known in Australia, Credit Suisse analyst Saul Kavonic has signaled that Treasurer Jim Chalmers could use the approval process to make pressure on suitors to make certain commitments. Origin’s Asia Pacific LNG (APLNG) venture is one of three eastern gas exporters in the crosshairs of intensifying pressure from the federal government to make more gas available to the domestic market at lower prices.

“The government could use its approval leverage to try to get concessions on domestic gas supply and pricing,” Kavonic said.

A Chalmers spokesperson said the transaction would be subject to regulatory processes and considerations, “so it is not appropriate to comment further at this time.”

As soaring fossil fuel costs drive up energy prices on Australia’s east coast, the Albanian government is debating a range of potential gas market interventions to rein in sky-high bills, such as as setting price caps on local gas sales and stricter limits on the amount of gas to be shipped as LNG.

Investment bank Macquarie said Friday that government policies regarding gas and possibly coal could influence Origin’s earnings outlook and affect the consortium’s final offer price.

CLSA analyst Daniel Butcher said the consortium’s offer, with a 55% premium, was “highly likely to succeed”. “We view the deal as a knockout offer,” he said. “The terms are pretty standard – due diligence, ACCC, FIRB – so we think the chances of the deal becoming binding are pretty low.”

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