This Monday marks a momentous day for the ASX. It has seen a long-term constituent, one that has been listed since 1962, depart its boards. That ASX share is Brickworks Ltd (ASX: BKW).
Birckworks is a popular blue-chip stock, so its loss will be felt by many an ASX investor. This ASX 200 company, as you might guess, is primarily a manufacturer of building supplies. But it has quite an interesting business model outside the world of brickmaking. Brickworks is also famous for its property portfolio, which it adds to by using exhausted sites previously used for its manufacturing activities.
The company is also known for its massive investment in another ASX 200 stock – Washington H. Soul Pattinson and Co Ltd (ASX: SOL). Brickworks and Soul Patts are well-known for a unique and complex cross-ownership arrangement. In a nutshell, Soul Patts has an approximatle 43% ownership stake of Brickworks, while Brickworks in turn owns 26% of Soul Patts.
This arrangement was originally designed decades ago to stop corporate raiders from taking control of either company, but it remains to this day.
But not a day longer. As we alluded to earlier, today marks the last time Brickworks shares traded in their own right on the ASX. Tomorrow, neither Brickworks nor Soul Patts shares will exist, at least in their familiar forms.
As investors in either company would know, Brickworks and Soul Patts have decided to make their decades-long affair official with a marriage.
Brickworks shares to elope from the ASX
It was first announced that the two companies would be tying the knot back in early June. This is not a true takeover, though. Both companies will technically be dissolved, with a new one to take their place. This new company will initially be known as 'TopCo', but will eventually rebrand back to Washington H. Soul Pattinson.
The marriage will see Soul Patts investors receive a new 'TopCo' share for every Soul Patts share owned. Meanwhile, Brickworks shareholders will receive 0.82 shares in the new company for every share held.
Last week, the union received the final green lights from shareholders and regulators to go ahead. It proved exceedingly popular, with more than 97% of shareholders in both companies voting in favour. This means that today is the last day that Brickworks shares traded on the ASX.
The marriage will become official on 24 September later this month. As one ASX story ends, another begins.
