Brickworks stock rating downgraded to Neutral by UBS on merger plans

Published 11/07/2025, 08:04
Brickworks stock rating downgraded to Neutral by UBS on merger plans

Investing.com - UBS downgraded Brickworks Ltd. (ASX:BKW) (OTC:BRKWF) from Buy to Neutral while raising its price target to AUD34.25 from AUD29.00, following the company’s merger announcement with Soul Patts.

The downgrade comes as Brickworks plans to merge with Soul Patts to create a new ASX-listed entity called TopCo, which will eliminate approximately 148 million cross-held shares between the two companies.

Under the merger structure, Soul Patts, Brickworks, and new shareholders will own approximately 72%, 19%, and 9% of the combined group, respectively, with shareholder scheme meetings expected to occur in the second half of 2025.

TopCo has secured full equity funding totaling approximately $1.4 billion for 34 million shares, which will be used to cover a portion of Brickworks’ outstanding debts, address other liabilities, and fund transaction costs.

The merger terms specify that Soul Patts shareholders will receive one TopCo share for every Soul Patts share held, while Brickworks shareholders will receive 0.82 shares for every Brickworks share held, implying a spot value of $34.15 per Brickworks share.

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