Construction materials manufacturer Brickworks has put off a vote on a proposal for the company to dismantle cross-shareholding arrangements with ASX listed investment company Washington H. Soul Pattinson.
In a statement, the company said its Independent Board Committee had agreed with shareholders Perpetual and Mark Carnegie to postpone a general meeting of shareholders in which a vote would be held on the proposal put forward by the two shareholders from May 5th to September 5th, saying the delay was necessary as the company was waiting on a ruling about the tax implications of the proposal as well as the resolution of other unresolved matters before the vote takes place.
“The IBC continues to believe that shareholders will be in a better position to receive and properly consider all of the relevant information they need when these matters are resolved” the company said in a statement.
Under arrangements which have been in place since 1969, Soul Pattinson and its associates hold a 48 percent shareholding of Brickworks, which in turn holds 43 percent of Soul Pattinson – arrangements which effectively prevent a takeover of either company.
A proposal put forward by Perpetual and Carnegie – who together control around 12.5 percent of Brickworks shares – would see Brickworks’ holding in Soul Pattinson cancelled in return for cash and a promissory note.
Brickworks has urged shareholders to vote against the proposal, saying its shareholding in Soul Pattinson brings in around $40 million in dividend earnings each year and helps offset the cyclical earnings from the company’s building products and land businesses.
Apart from Brickworks, Soul Pattinson holds investments across a number of sectors including coal, pharmaceuticals, telecommunications, agriculture and finance.
Originally slated for November last year, the vote on the proposal has been postponed on several occasions largely over uncertainty a tax liability which media reports quote Perpetual fund manager Matt Williams as saying may be as high as $200 million overall.