Soul Patts makes $4bn scrip bid for Milton

Robert Millner chairs both Soul Patts and Milton. Picture: Adam Yip

The $4bn scrip buyout proposal for Milton by its second-largest shareholder – Washington H. Soul Pattinson – has been cautiously welcomed by its investors.

But some are questioning how attractive the offer will be for shareholders in the listed investment group in the weeks ahead, with Soul Patts’ share price currently trading at a major premium.

The proposal implies a value of $6 per Milton share based on the price of shares before the deal was announced, equating to a $4bn equity value.

WHSP owns about 7.6 per cent of Milton and both companies are chaired by Robert Millner, but to appease concerns about conflicts of interest it is understood that Mr Millner excused himself from the negotiations on the Milton side.

Previously WHSP, which owns major holdings in companies such as Brickworks, New Hope and TPG Telecom, has come under attack from major investor Perpetual over its cross-shareholding structure with Brickworks and matters relating to corporate governance. But the latest transaction is expected to see Brickworks holding in Soul Patts diluted. Soul Patts’ holding in Brickworks is currently at about 43 per cent and Brickworks in Soul Patts about 40 per cent.