Proxy firm ISS recommends vote in favour of Brookfield-led consortium's Origin Energy bid

By Scott Murdoch

SYDNEY (Reuters) - Proxy advisory firm Institutional Shareholder Services (ISS) has recommended investors vote in favour of a Brookfield-led consortium's $10.5 billion bid for Australia's Origin Energy.

The offer has been rejected by pension fund AustralianSuper, which is Origin Energy's largest shareholder.

Brookfield and EIG Partners has offered A$9.53 per share for Origin Energy. Shareholders are due to vote on the bid on Nov. 23. Seventy-five percent of votes must be cast in favor of the offer for it to be approved.

"The transaction offers shareholders a cash exit at a premium in exchange for surrendering the payoff of a potential successful energy transition for the company," the ISS report said.

AustralianSuper, which holds a 15.03% stake, has said it believes the consortium's bid substantially "undervalues" Origin and will vote against the offer.

Brookfield will take ownership of Origin's energy markets business if the vote is in favour of the bid, while EIG's MidOcean Energy will gain a 27.5% stake in Australia Pacific LNG (APLNG).

If the shareholder vote fails, the Brookfield-led consortium said last week it has a back-up plan for an off-market takeover that would require the minimum acceptance of 50.1% of the register and give it control of Origin's board.

In that scenario, EIG will own Origin and sell the energy markets business to Brookfield, meaning remaining shareholders, including AustralianSuper, will own only APLNG.

(Reporting by Scott Murdoch in Sydney; Editing by Paul Simao)