Brickworks has defended its four-decade-long cross-shareholding with Washington H Soul Pattison, but insists it has not shut the door on ending the arrangement.
Brickworks lead independent director Robert Webster says although a review of the company’s corporate structure found maintaining the current arrangements is best for shareholders, the board is open to further discussions.
“The door is not shut. It will remain open,” Mr Webster said in response to a question from Perpetual Investments head of equities Matt Williams during Tuesday’s annual general meeting in Sydney.
Perpetual, Brickworks’ second-largest shareholder with a 12.5 per cent stake, has been agitating to end the shareholding structure where Soul Patts owned 44.4 per cent of Brickworks and Brickworks owned 42.7 per cent of Soul Patts.
On Monday, the fund manager said it had teamed with investment banker Mark Carnegie in a bid to unlock shareholder value in Brickworks and Soul Patts.
Despite Brickworks maintaining the status quo, Mr Williams said Perpetual would push on with its call for change.
“I remain, although disappointed by the decision reached today I am encouraged by the fact you have said that the door is not closed and other avenues as they may arise will be explored,” Mr Williams said.
Perpetual has previously said ending the cross shareholding structure would unlock about $1.5 billion in value for shareholders.
However, Robert Millner, who is chairman of both Brickworks and Soul Patts, said the two companies had outperformed the market.
“It is not as though we have been dragging the chain and tearing up shareholders’ money, shareholders have been very well rewarded over a long period of time,” Mr Millner told reporters after the AGM.
“Apart from some very, very early shareholders and there would only be a handful of those, people have bought Soul Pattison and Brickworks shares knowing that there is a cross-shareholding.”
Meanwhile, in a trading update to shareholders, Brickworks chief executive Lindsay Partridge said while earnings had stabilised in recent months, the timing of a recovery in the housing sector remained unknown.
“The easing of interest rates that commenced this time last year has yet to have any meaningful impact on detached housing approvals and construction,” Mr Partridge told shareholders.
“Although there is some anecdotal evidence that a recovery is imminent, it remains difficult to forecast when conditions might improve given the headwinds that still constrain a sustained recovery.”
At 1547 AEDT, Brickworks was up eight cents at $11.29.
