Soul Patts (ASX:SOL) share price slips amid completed Milton merger

The ASX investment icon is having a lacklustre day on the market so far.

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The Washington H. Soul Pattinson and Co Ltd (ASX: SOL) share price has gotten off to a shaky start this Tuesday. At the time of writing, Soul Patts shares are trading at $37.70 each, down 0.16% for the day so far.

That’s not a direction most shareholders would probably welcome. But, even so, Soul Patts is still performing better than the S&P/ASX 200 Index (ASX: XJO). The ASX 200 is down by 0.95% so far today to 7,209 points. 

So, we have some news today that might be contributing to Soul Patts’ performance thus far. Before market open this morning, Soul Patts announced the proposed merger between Soul Patts and the Listed Investment Company (LIC) Milton Corporation Ltd (ASX: MLT) has been completed.

Milton merger moves the markets

This proposed merger was first announced back in June. It proposed that Milton, one of the ASX’s oldest LICs, merge into Soul Patts, bringing with it a $3.85 billion (as of 31 August) portfolio of shares and cash. Well, now that merger has been completed and Soul Patts is the new owner of Milton’s portfolio.

Although Soul Patts is not technically an LIC, it’s probably the closest thing to it on the ASX boards. It is a very old company, having first opened its doors in its current form in 1903.

More recently, Soul Patts has won the distinction of being the ASX’s best performing dividend share in terms of its payout history. The company has now managed to increase its dividend every single year since 2000, a record unmatched on the ASX boards.

The merger with Milton will add plenty of diversification to Soul Patts too. As we looked at back in June, Soul Patts has a relatively concentrated share portfolio. Its major holdings are in Brickworks Ltd (ASX: BKW)New Hope Corporation Limited (ASX: NHC), TPG Telecom Ltd (ASX: TPG), and Australian Pharmaceutical Industries Ltd (ASX: API). That’s in addition to some smaller holdings.

In contrast, Milton has (or had) a far less concentrated portfolio. Its major holdings (as of 31 August) included Soul Patts itself, as well as Commonwealth Bank of Australia (ASX: CBA), Macquarie Group Ltd (ASX: MQG)Westpac Banking Corp (ASX: WBC), and BHP Group Ltd (ASX: BHP).

Its largest 20 holdings made up 71.6% of its total portfolio as of 31 August. And all of those holdings are now part of the Soul Patts’ portfolio.

About the Soul Patts share price

Soul Patts has had an exceptionally strong run in recent months. The company is up a very healthy 25.2% year to date so far and up an even rosier 56.7% over the past year. Over the past 5 years, the company has added 136.4%.

At the current Soul Patts share price of $37.70, the company has a market capitalisation of $9.02 billion and a dividend yield of 1.65%.

Should you invest $1,000 in Soul Patts right now?

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Motley Fool contributor Sebastian Bowen owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended Brickworks. The Motley Fool Australia owns shares of and has recommended Brickworks, Macquarie Group Limited, and Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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