Topco, the new entity resulting from the proposed merger between Washington H. Soul Pattinson and Co. Ltd (Soul Patts) and Brickworks Ltd, is fully funded following a successful $220 million capital raise, announced on Monday.
The funding, secured at no discount to Soul Patts’ last closing price of $42.61, ensures that the merger, announced on June 2, can proceed without the need for further equity issuance.
Successful capital raise secures merger funding
The placement, which is fully underwritten by Aitken Mount Capital Partners, is conditional only upon the implementation of the acquisition schemes to acquire both Soul Patts and Brickworks.
The announcement follows earlier commitments to issue 34 million shares, with a total expected raise of around $1.4 billion. Proceeds from the capital raise will be used to address a range of financial obligations, including a substantial portion of Brickworks’ outstanding debt, the Soul Patts convertible bond, and transaction costs such as stamp duty.
Read more: Shares surge: Brickworks and Soul Patts propose $14BN merger
With the capital secured, Topco is now positioned to execute the merger, which is seen as a key milestone for both companies.
Strong investor support builds confidence
The completion of the capital raise provides shareholders with confidence that the strategic merger will proceed smoothly, with all necessary funding in place ahead of the scheme votes.
“Securing full equity funding is a key milestone that gives us maximum flexibility and certainty as we continue to advance the proposed merger,” said Todd Barlow, CEO and managing director of Soul Patts. “It reflects strong investor support and reinforces our confidence in the long-term value creation for all shareholders.”
Merger paves the way for growth and efficiency
Mark Ellenor, CEO of Brickworks, said the successful capitalisation of Topco sets the merged company up in a strong position.
“With the equity now in place, we are well set to deliver on the strategic benefits of the merger, backed by a simplified balance sheet and clear growth agenda.”
Under a longstanding cross-shareholding agreement, initiated in 1969 to diversify earnings, Soul Patts holds 43% of Brickworks, while Brickworks owns 26% of Soul Patts. Although historically beneficial, previous attempts to unwind the structure were stymied by significant capital gains tax liabilities.
The merger is expected to streamline both companies’ balance sheets, enhancing operational efficiency and unlocking long-term growth potential.
A shareholder vote on the merger is anticipated in the fourth quarter of 2025, subject to regulatory and court approvals. If approved, the transaction is expected to complete shortly thereafter.