Shares of Origin Energy (ASX:ORG) closed 34.8% higher on November 10 following a takeover bid. Australia’s leading electricity and natural gas retailer said it received a takeover bid from a consortium led by Canada-based Brookfield Asset Management (NYSE:BAM) TSE:BAM.A), Canada’s leading global alternative asset manager.
Per the offer, Brookfield Asset Management, along with MidOcean Energy, an LNG company formed and managed by EIG, intends to acquire all of Origin’s shares for AU$9 a piece. This indicates a premium of 54.9% to its closing price of $5.81 on November 9. Also, it is 60.6% higher than the ORG’s one-month volume weighted average price (VWAP) of $5.60.
Overall, the deal values Origin Energy at AU$18.4 billion (enterprise value).
Although investors cheered the news (as seen by the jump in the stock price), the uncertainty regarding the closure of the deal at this early stage poses a risk.
Is Origin Energy Stock a Good Buy?
Origin Energy stock is a Moderate Buy on TipRanks based on three Buy and Seven Hold recommendations. Due to the spike in ORG stock, these analysts’ average price target of AU$6.26 implies 20.1% downside potential.
Along with analysts, ORG stock has a positive signal from bloggers. Meanwhile, it has a Smart Score of six on 10, implying a Neutral outlook.
