Brickworks and Soul Patts EGMs delayed
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The pending shareholder meetings for Brickworks and Washington H Soul Pattinson to vote on the Perpetual/Carnegie proposal to unwind the decades old cross share holding between the two has been delayed until late February at the earliest. Shareholders needn't take any action yet.
The delay has been requested by each company’s Independent Board Committee as they await two critical rulings. The first from the Australian Tax Office as to how much tax would be payable if the proposal went ahead. Estimates range from less than $200m to multiples of that. The second pending ruling is from the ASX, who have to decide whether Brickworks and Souls will be able to vote their shares in each other against the proposal. If they are, the proposal will certainly fail.
| Sell | Above $22.00 |
| Hold | Up to $22.00 |
| Buy | Below $15.00 |
Operationally, Brickworks look set for a better 2014 with its Austral Bricks and Masonry divisions reporting improved results for the first quarter of 2014 thanks to an uptick in housing construction. Elsewhere there’s little change. Both companies own a nice collection of assets – independent of the pending corporate action. On purely valuation grounds, Souls remains the pick of the two, and with its share price only rising a tad since Soul Patts and Brickworks: The great unwinding – Part 3 (Buy – $14.23) it remains a BUY. Equally Brickworks' recommendation remains unchanged, HOLD.
Note: The model Growth and Income portfolios own shares in Soul Pattinson.
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