By Brian Robins
A backer of a proposal to revamp the cross shareholdings between Brickworks and Washington H. Soul Pattinson and Co concede it will be a "close run thing" for the move to succeed.
Dissident shareholders Perpetual and M.H. Carnegie & Co have ratcheted up the pressure to break the cross shareholdings by calling shareholder meetings to consider proposals to sever the long standing links.
The two dissident shareholders have called a meeting of Brickworks shareholders to consider cancelling Brickworks shareholding in Soul Pattinson as well as distributing Soul Pattinson’s 27 per cent stake in TPG Telecom to shareholders.
If the proposal does win sufficient shareholder support, it could see shares in the two companies worth in excess of $22 each, which is substantially higher than the present value of around $16 for shares in the two companies.
Legal advice that Soul Pattinson would not be able to vote its stake in Brickworks to block the proposal from proceeding gives the proposal a chance of proceeding, if the legal advice is correct.
Perpetual and Carnegie claim a simple majority of votes at a shareholder meeting could carry the day.
Soul Pattinson holds a 44.5 per cent stake in Brickworks with the building materials company holding a 43 per cent shareholding in Soul Pattinson. Between them Perpetual and Carnegie control 12-14 per cent of Brickworks.
A meeting of Brickworks shareholders has been convened for November 25 to consider the proposal.
Brickworks told shareholders not to take any action in response to the convening of the meeting and the proposal to be put forward.