AustralianSuper ups Origin stake, says share price below value

The news: AustralianSuper, the largest shareholder of Origin Energy, has increased its holding in the gentailer and said its share price is too low, the Australian Financial Review reported. That puts pressure on Brookfield and EIG to increase their takeover offer for Origin.

The numbers: The super fund said it raised its interest in Origin by 1.02% to 13.68% because the company’s current share price was “substantially below our estimate of its long-term value”. Origin's share price was down marginally to $8.66 in afternoon trade.

The context: Canada’s Brookfield and EIG Partners of the United States offered $18.7 billion, equivalent to $8.91 a share, when the parties signed a binding agreement in March. The deal requires 75% approval from the votes cast, and more than 50% of Origin investors in number voting, and must pass regulatory hurdles and approvals. The takeover offer price has fallen since it was agreed because part of the payment is in US dollars, which have softened against the Australian currency.

What they said: “AustralianSuper has been a long-term shareholder ... and the fund’s investment process is built around determining the long-term intrinsic value of the companies we invest in,” the superannuation fund’s spokesman said.