Brickworks slams Perpetual proposal

Group says proposal to unwind cross-ownership has 'inaccurate' information.

Brickworks Ltd has recommended shareholders vote against a $2.2 billion proposal to unwind its cross-ownership structure with Washington H. Soul Pattinson and Company Ltd.

In a statement to the Australian Securities Exchange, Brickworks said the proposal from Perpetual Investment Management and M.H. Carnegie & Co has significant potential tax liability.

The information already provided by Perpetual and Carnegie is insufficient and in some cases "misleading, incomplete or inaccurate", Brickworks said.

Brickworks also said shareholders need to consider an independent expert's report, which will not be available before a general meeting scheduled for November 25.

The group said there is uncertainty about which of its shareholders are eligible to vote on the proposal and it has sought clarification from the Australian Securities Exchange.

Brickworks said it asked Perpetual and Carnegie for a postponement of the meeting but has not yet received a satisfactory response.

"The independent directors are concerned shareholders are being unnecessarily pressured into making a hasty decision, with risks of materially adverse consequences to the value of their shareholding," Brickworks said in a statement.

Soul Pattinson and Brickworks are considering proposals to end their cross-shareholding agreement, which Mark Carnegie and Perpetual's head of equities Matt Williams believe will unlock value for Brickworks investors, with Soul Pattinson already receiving an extension of time to call an extraordinary general meeting.

Perpetual and Carnegie have also put forward a resolution to appoint an additional director to the Brickworks board.

Brickworks said its board is concerned about the lack of disclosure about the process surrounding Elizabeth Crouch's nomination and is unable to determine if the candidate is the best person available.

The Brickworks board has not made any recommendation on this resolution and considers it a matter for shareholders.

At 1114 AEDT Soul Pattinson shares were 2.36% lower at $14.45, against a benchmark S&P/ASX200 index rise of 0.44%.