Asset manager and Origin Energy shareholder Perpetual has thrown its weight behind AustralianSuper’s very public campaign against a takeover bid for the ASX-listed energy company by a foreign consortium, saying that the super fund is “doing the right thing and standing up for their beliefs”.
Perpetual’s head of Australian equities, Vince Pezzullo, gave a blistering defence of shareholder rights at the Investment Magazine Fiduciary Investors Symposium. He declared Perpetual, which is understood to own about 3 per cent of Origin, backed AustralianSuper’s position that the company is “worth well more than $9.50 [per share]” – the final offer the consortium led by Brookfield and EIG put forward earlier this month.
“Look at just the response from the bidding parties, some of the comments they made are disgraceful. They don’t own this fight, AusSuper owns this fight – they’re the owners of the company,” Pezzullo told the crowd of senior investment executives in Healesville, Victoria, on Monday.
“I’ve got a real problem with people giving up on their philosophy and discipline. It pays to stick to your philosophy and maintain some form of discipline when you’re investing.”
The comments came as AustralianSuper announced to the press it has rejected an “eleventh hour and unsolicited” offer from the Brookfield and EIG, inviting the fund to join the takeover consortium to get the deal across the line. AustralianSuper rejected the proposal a few hours after receiving it and reiterated its willingness to “providing capital to assist Origin as it prepares to transition over the coming decades”.
Pezzullo echoed the sentiment and pointed out that Australia is perfectly capable of managing the energy transition on its own. “We don’t need… foreign companies to teach us how to do a transition,” he said. “It is the duration that’s the issue. The solution is going to take a long time to get done. You have to do it smartly rather than throwing money at the problem.”
‘Behind closed doors’
HESTA’s head of portfolio management, Jeff Brunton, and ACSI’s executive manager of stewardship, Ed John told the symposium that there are major pros and cons of such a public campaign, which has played out in the national newspapers and industry press.
Pezzullo said that most of the time, Perpetual will act behind closed doors, except for its engagement with logistics company Brambles and its proposed billion-dollar foray into a new plastic pallet pool for Costco in the US last year.
“To be blunt, you want to make it look like their [the company’s] idea. You give the advice to all levels of management, get to the board, [make the argument] that ‘this [odea] is value accretive, you’ve got a future issue and need to act early’,” he said.
HESTA’s Brunton, who works for one of the more vocal super funds on its active ownership efforts, added that the time pressure is also an important element. It came out publicly last year to vote against AGL’s proposed demerger of its coal power generator business Accel Energy and retailer AGL Australia.
“There’s lots of computation going on behind closed doors, but we also thought it was the right moment to make that public at the time.”
ACSI’s John, however, is of the opinion that there going public if “private discussions have run their course”.
“I think if we put out a press release out for every company meeting we did, the meetings would dry out pretty quickly or their content would get pretty boring,” he said.
“It’s [active engagement] not just a marketing exercise, it’s actually conviction and where people are out and clear about that, it’s good to have those opinions out in the marketplace.”
