Could shares of Washington H. Soul Pattinson and Co Ltd (ASX: SOL), or Soul Patts for short, hit $50 in 2025? Well, they are certainly a lot closer to that mark today than they were at the end of last week.
The biggest piece of news on the ASX yesterday was the blockbuster announcement that Soul Patts would be merging with its longtime corporate collaborator and cousin, Brickworks Ltd (ASX: BKW). On paper, Soul Patts and Brickworks don't seem that similar. One business is a 122-year-old investing house that first started out as a chemist. The other, a construction materials manufacturer with a star-studded property portfolio.
Yet, despite these initial differences, Soul Patts shares and Brickworks stock have been joined at the hip for decades. Back in the late 1960s, the companies stitched up a complex arrangement which saw each assume a significant share of ownership over the other's shares. Brickworks ended up taking a 26% stake in Soul Patts, while Soul Patts took a 43% chunk of Brickworks. This was done in order to protect both companies from takeover attempts and corporate raiders in years gone by, but has remained in place to this day.
Now, after all this time, Soul Patts and Brickworks have finally decided to make it official with a corporate marriage.
The ASX marriage of the century
As we covered yesterday, the merger will see Soul Patts shareholders receive one share of a new company, to be rebadged as the 'new' Washington H. Soul Pattinson and Co, for each share owed. Brickworks shareholders, meanwhile, will receive 0.82 shares in the new Soul Patts for every share owned.
We haven't heard the final details of the merger process yet, but Soul Patts told the market to expect shareholder meetings and approval votes to be scheduled over the second half of this year.
As we also discussed yesterday, both Soul Patts and Brickworks saw their shares soar in value over the day's trading to new records. Brickworks ended up closing 27.59% higher at $35.10, while Soul Patts shares soared 16.44% to a flat $43.
So are the '40s' the new normal for Soul Patts shares? Could the investing house even get to $50 a share in 2025?
Is $50 next for Soul Patts?
Well, the market is a fickle place where most things are possible. A $50 price tag for Soul Patts shares is certainly among them.
However, I don't think it is likely, at least for what might soon be the 'old' Soul Patts. Sure, this merger will probably unlock a lot of value for shareholders. The potential cancellation of the cross-owned shares could provide a significant windfall, if nothing else. But I'd say the potential upside from the merger is worth around 10%-15% from where Soul Patts and Brickworks closed last week.
That might be why, after yesterday's massive gains, both companies came off the boil a little today (despite a healthy jump for the broader market).
I have no doubt that Soul Patts will one day be worth $50 a share, merger or no merger. The company has an enviable track record of delivering consistent, market-beating returns. I just don't think the company can, under any fundamental justification at least, add another 17.6% or so on top of the gains we saw yesterday over the rest of 2025.
Let's see how the rest of the year goes for Soul Patts and Brickworks.
