Good morning,

A little something on the valuation of Origin’s fast-growing Octopus Energy.

Within the pages of Monday’s supplementary scheme booklet was a very short announcement that the British conglomerate is raising capital. Interestingly, Origin is electing to rely on the valuation provided by Grant Samuel’s report.

“Origin is considering a further investment of capital into Octopus Energy to accelerate the growth of the business,” it read. “If undertaken, Origin would expect any investment in the near term to be at a valuation of Octopus Energy broadly consistent with the valuation presented in the Independent Expert’s Report.”

Octopus scored a £3.5 billion ($6.9 billion) valuation at its most recent funding round in December 2021, but it has seen an 83 per cent increase in customer accounts and recorded more than $1 billion EBITDA in FY23.

Grant Samuel valued Origin’s 20 per cent interest in Octopus Energy at a range of $2.25 billion to $2.45 billion in the October scheme booklet. This implies a total valuation around the $11.25 billion to $12.25 billion mark.

It will be interesting to know how largest shareholder AustralianSuper – which branded Brookfield and EIG Partners’ bid as “substantially below” its estimate of Origin’s long-term value – is valuing the business. AusSuper has praised UK-based Octopus Energy as a “fast-growing, renewable energy-focused and technology-driven energy supplier of the future”.

In other news, hats off to Macquarie’s quant team who correctly picked Without A Fight for the win at Flemington. Finally, a champagne-popping moment at 50 Martin Place.

Happy reading,

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