Latest news with #ToddBarlow
Reuters
4 days ago
- Business
- Reuters
Australia's Soul Patts to take over Brickworks in $9 billion merger
June 2 (Reuters) - Australian investment firm Washington H Soul Pattinson ( opens new tab will buy out its building products affiliate Brickworks ( opens new tab creating a new company worth A$14 billion ($9.03 billion), the companies said on Monday. The deal streamlines the two companies' complex cross-ownership of each other that has been in place for nearly 60 years and has long been criticised by corporate governance experts in Australia. Brickworks shareholders will receive 0.82 shares in the new firm with an implied value of A$30.28 per share, a 10.1% premium to the stock's closing share price on Friday, valuing the building products maker at A$4.62 billion ($3 billion). Its shares were 17.7% higher in early trade on Monday at A$32.37, while Soul Patts stock gained 9.2%. Brickworks was set for its biggest single day rise since September 2009 and was the top gainer on the ASX200 (.AXJO), opens new tab index, which was down 0.1%. Soul Patts would own 72% of the new company. Holders of Brickworks would own 19%, while the remainder would be offered to new shareholders. Soul Patts investors will receive one share in the new company for each of their existing shares. Soul Patts has a 43% shareholding in Brickworks, and Brickworks owns 26% of Soul Patts. With the deal, Soul Patts' free float will increase from A$8.4 billion to A$12.6 billion, Chief Executive Todd Barlow told an investor briefing Monday. The new entity has received commitments worth A$550 million in shares, fully underwritten by Aitken Mount Capital. A shareholder vote to approve the deal is due to be held later this year. ($1 = 1.5499 Australian dollars)
CNBC
4 days ago
- Business
- CNBC
Stocks of Australia's Soul Patts and Brickworks surge after merger ends 56-year cross-ownership
Stocks of Australian investment firm Washington H. Soul Pattinson, also known as Soul Patts, and its affiliate Brickworks surged after both companies announced a A$14 billion ($9 billion) merger. Shares of Soul Patts traded 13.78% higher, while Brickworks, Australia's largest brickmaker, jumped 22.32% as of 1 p.m. local time. As part of the deal, a new company listed in Sydney will acquire all outstanding shares of Soul Patts and Brickworks. The merged entity is projected to be worth around A$14 billion ($9 billion), with holdings across real estate, private equity, and credit totaling A$13.1 billion. "Merging Soul Patts with Brickworks makes a lot of strategic and financial sense," Soul Patts CEO and Managing Director, Todd Barlow, said in a statement. He added that the deal "simplifies the structure, adds scale, and creates a more investable company." The merger will unwind a 56-year mutual ownership that was designed to fend off hostile takeovers and promote long-term investment strategies. Soul Patts owns 43% of Brickworks, while the brickmaker has a 26% stake in Soul Patts. However, critics argued that it suppressed shareholder value and corporate transparency. Brickworks shareholders are set to receive an implied value of A$30.28 per share, reflecting a 10.1% premium over the stock's closing price last Friday. Pitt Capital Partners is acting as adviser to Soul Pattinson, and Citigroup Global Markets Australia is advising Brickworks. The merger follows several unsuccessful attempts to unwind the cross-shareholding between Soul Patts and Brickworks, including a concerted effort by Perpetual Investment Management and venture capitalist Mark Carnegie between 2012 and 2017, which was dismissed after the Federal Court ruled that the structure was not detrimental to shareholders.
West Australian
4 days ago
- Business
- West Australian
Long-time partners Brickworks, Washington H. Soul Pattinson tie knot for $14b
Investment house Washington H. Soul Pattinson has secured a $14 billion deal to snap up diversified industrial group. Brickworks. The union ends a bizarre decades-long cross-shareholding each company had in the other, with Soul Pattinson holding 43 per cent of Brcikworks, and the building materials company holding 26 per cent of Soul Pattinson. Soul Patterson chief executive and managing director Todd Barlow said the deal made a lot of strategic and financial sense. 'It simplifies the structure, adds scale, and creates a more investable company,' Mr Barlow said. 'In many ways Soul Patts and Brickworks have evolved together and shared in the capital stability provided by our cross-shareholding over the past 56 years. 'The cross-shareholding served an important purpose over the years by achieving diversification of earnings, promoting long-term investment decisions and creating significant long-term value for shareholders. 'However, we believe the combined business will be very well diversified and in an even stronger position to deliver enduring value for all shareholders.' Brickworks boss Mark Ellenor said the building materials company had undergone significant evolution over the past few decades, with the growth in value of its property assets and its building products portfolio. 'The time is now right to combine with Soul Patts, bring our portfolios under one investment company, and become a well-resourced and more diversified group delivering long term value for our shareholders,' Mr Ellenor said. The union will create a new ASX-listed company, with Brickworks shareholders receiving an implied value of $30.28 a share — a premium of 10.1 per cent to their last closing share price. Based on the merger ratio and issue of shares, Soul Patts shareholders, Brickworks shareholders and new company shareholders will receive about 72 per cent, 19 per cent and 9 per cent, respectively. More to come.
