Australia's Brickworks retreats from Soul Patts' merger-led rally

Washington H. Soul Pattinson and

03/06/2025 01:46

** Shares of Brickworks BKW.AX fall as much as 1.3% to A$34.66 in early trade

** Stock among top losers in the benchmark ASX 200 index .AXJO

** Washington H Soul Pattinson SOL.AX said on Monday that it would buy out Brickworks, its building products affiliate, and form a new ASX-listed company with expected valuation A$14 billion ($9.08 billion)

** BKW's stock closed 27.6% higher in the previous session

** Morningstar says both companies are overvalued after rally, and adds proposed merger does not create any value

** The investment research firm cuts Brickworks fair value estimate by 9% to A$29

** Brokerage Ord Minnett says proposed merger has closed the gap between its net value asset (NAV) estimate and current share price; downgrades stock to "hold" from "accumulate"

** Brickworks stock up 36.8% so far this year, as of last close

($1 = 1.5411 Australian dollars)

 (Reporting by Nikita Maria Jino in Bengaluru)

 ((Nikita.Jino@thomsonreuters.com;))