Australian investment firm Washington H. Soul Pattinson (SOL.AX) and building materials group Brickworks (BKW.AX) said on Monday they have jointly secured full funding for their proposed merger to create a $9.15 billion ASX-listed entity called Topco.
The companies have secured an additional A$220 million ($143.81 million) in funding, priced at no discount to Soul Pattinson's last closing price of A$42.61. The proceeds will be used to reduce Brickworks' debt and address other outstanding liabilities.
Topco is expected to debut with a market value of roughly A$14 billion ($9.15 billion), backed by A$13.1 billion in diversified assets including property, private equity and credit holdings.
"With the equity now in place, we are set to deliver on the strategic benefits of the merger, backed by a simplified balance sheet and clear growth agenda," Brickworks CEO Mark Ellenor said.
Combined with the capital raise announced in June and July, Topco has secured commitments for 34 million shares, generating about A$1.4 billion in proceeds. The merger is now fully funded, with no further share issuances required, the companies said in a joint statement on Monday.
The deal streamlines the two companies' complex cross-ownership of each other that has been in place for nearly 60 years and has long been criticised by corporate governance experts in Australia.
Brickworks' outstanding debt stood at A$721 million, as of half-year period ended January 31, according to the company's report.
Shares in Soul Pattinson were up 0.6%, as of 0108 GMT, while those in Brickworks largely traded flat. The broader benchmark (.AXJO) fell marginally by 0.1%.
($1 = 1.5272 Australian dollars)
