Origin Energy on Thursday rejected a “complex” $10.6 billion back-up offer by a Brookfield-led consortium to buy out the firm but recommended investors agree to the group’s existing bid.

Origin shares were down 2.5% to A$8.12 in early trade on Thursday to the lowest level in eight months.

Origin said in a statement its board had deemed the revised proposal “incomplete, complex, highly conditional and not providing sufficient certainty for its shareholders”.

Brookfield declined to comment.

Instead, Origin said its investors should vote in favour of the consortium’s previous offer at a meeting due to be held in Sydney on Monday.

The consortium has offered A$6.59 and $1.86 in cash and a A$0.39 special dividend per Origin share. Taking into foreign exchange movements, the bid is now worth A$9.39 per share.

The revised proposal, revealed last week, was at the same price but would allow institutional investors to remain invested in Origin’s energy markets business that would be owned by Brookfield.

If that bid failed to achieve 75% shareholder support, an alternative proposal has been lodged that would see Origin sell the energy markets business to Brookfield for A$12.3 billion ($8.14 billion).

In that case, consortium partner EIG would make an off-market takeover offer for the rest of Origin, largely a 27.5% stake in Australia Pacific LNG (APLNG).

Origin shareholders would receive A$9.08 per share, or $10.2 billion in total, with an additional A$0.22 a share if EIG got up to 90.1% control of Origin.

“It is also the board’s view that the value of the revised proposal does not adequately compensate shareholders, including taking into account the extended timeline that the proposal would require,” Origin said.

The new revised proposal also includes requiring finalisation of various funding arrangements along with a set of regulatory approvals, thereby extending the timeline of the deal, Origin said.

($1=1.5108 Australian dollars)

Reuters