True that @Strawman. I remember reading probably over 10 years ago about how much money Brickworks made from their property division and being surprised by it. Essentially, part of their strategy was to buy cheaper land on the outskirts of cities and operate their brick factories ("brickworks") there for decades and during that time the city would expand and their land became in demand for housing developments, so they could then set up further out or in a dedicated industrial zone and sell the land where their old brickworks had been for many multiples of what they had originally paid for that land. They often owned land around their brickworks also, a sort-of exclusion zone, so that land would be sold also.

Back then, that land was recorded on their books at cost if I remember correctly, not at current market valuations, so when they did get around to selling the land to property developers for huge markups on their original buy price, it could really move the dial in terms of their profits in those years.

They also had a significant investment portfolio and they invested in all sorts of businesses, many as "Subs", and I always knew when I saw mirror "Subs" notices from both Soul Patts and Brickworks that that particular holding was in Brickworks' investment portfolio, not held directly by Soul Patts, because when it was held only by Soul Patts there was only one notice lodged, but when it was held by Brickworks there were two: One by Brickworks and a mirror notice by Soul Patts because Brickworks was considered a controlled entity of Soul Patts because of Soul Patts' high percentage ownership of Brickworks, so Soul Patts as "controllers" of Brickworks had to lodge that mirror "Subs" notice in those cases.

I've been in and out of both over the decades and have loosely followed them throughout. Yep, end of an era for sure. But the business model lives on, albeit simplified under a single company structure.

I came to Brickworks somewhat late, after having previously bought SOL during the bottom of the Covid panic and selling for a quick double about a couple of years later.

It has been good to me in that time, and I intend to continue holding it under the SOL banner.

What should the new cost basis (per unit/share) for my SOL position be, keeping in mind 1 BKW = 0.82 SOL (per the original announcement of TopCo)? Is it as simple as transferring the weighted average price of the Brickworks holdings prior to the merger, or do I have to do more complicated math to work out what the effective cost basis for the SOL holding is going to be? My brokerage has reset the cost basis to zero!

But more importantly @Strawman, how will our straw portfolios reflect the change?

Good question @Bushmanpat

My take is that the conversion to Topco occured on the 17th of September, with Sol shareholders getting 1 share in Topco for every share held in Soul Parts. And brickworks shareholders getting 0.82 shares in Topco.

Topco closed at 41.30 that day.

We can't batch convert all share holdings given the data structure, so I will just close out all BKW share holdings at $33.87 and SOL share holdings at $41.30.

If anyone wants the conversion they can just buy shares in Topco themselves (you'll get a very small free kick because the share price has dropped slightly), or I can backdate a trade manually if anyone wants a more precise action.

What do you think?

I think topco is going back to its old ticker (sol) and changing its name back to solpats. I thought it was tomorrow but I could be wrong. You may be able to leave sol holdings as is, and there will just be a gap in the data of a week or so. Brickworks you may have to cash out and buy back in if you cant batch it ( luckily strawman doesn't do capital gains tax or brokerage)

Sounds good @Strawman Happy to take the cash and buy back into SOL if desired.

One bug though is that SOL and BKW paid a dividend on 5th Sept which doesn't seem to be reflected in the trade history.

Hi @Bushmanpat - the way dividends are credited here changed recently and they're now paid as cash rather than automatically reinvested. I just had a look at your portfolio here and scrolled down to the last line, Cash, and clicked on "Show Trades" on the right of that "Cash" line, and the Brickworks dividend is there - dated 21st August which is the day that Brickworks went ex-div for that latest dividend (not the day they actually paid it), so it has been credited to your cash balance here. It won't show up as a trade under Brickworks however like it used to when dividends were automatically reinvested here.

Thanks @Bear77. I didn’t know this had changed.

Thanks @Bear77 . I should have looked at cash as well! Been exceptionally busy IRL so not giving other things like SM the attention I should.

For those who held BKW and got converted to SOL, any takers for my cost basis/unit price question? Thank you in advance!

@thunderhead I believe they have sorted a scrip for scrip CGT roll over with the ATO, but the final details will be included with their notifications to shareholders. So your cost base should be a simple calculation with the 1 BKW = 0.82 SOL shares. So if you had 1000 BKW shares bought at $10 a share, you will now have 820 SOL shares with a cost base of $12.195/ share. If there has been a DRP involved then you will have to do each issue separately. I should say here I'm just an everyday hack, not a tax specialist, so take everything I say with a GRAIN OF SALT!

Sometimes, the ATO will publish their guidelines for shareholders as to what the cost base should be but that won't happen for a while. Such as the COL demerger form WES found here

https://www.ato.gov.au/individuals-and-families/your-tax-return/instructions-to-complete-your-tax-return/paper-tax-return-instructions/2019/supporting-information/wesfarmers-limited-demerger-of-coles-group-limited-2018

I know this is a demerger rather than a merger but I dare say a similar thing will be published after the deal is complete.

I held BKW in my SuperFund portfolio. Just checked the platform (BT Pano) - cost base of 'new' SOL holding reset to 0.00. Units converted at 0.8199 SOL per BKW unit.

Value of the new SOL parcel is the same as it was as BKW (allowing for SP drift over the past few days). Annoying about the cost base, but I assume for tax treatment it'll be exactly the same as the original BKW holdings (???)

In the soulpats meeting Tod Barlow said they had a draft ruling from the ato saying as much, but they typically don't release an official ruling until after the event has passed. It sounded like they were quite confident that shareholders essentially wouldn't notice the change. That was the case for sol>topco>sol, I assume he meant brickworks holders too.

Thank you @Bushmanpat.

I expect ATO rollover relief for this deal too.

Fortunately I have no DRPs involved here.- just a bunch of BKW shares bought at various times for an average price of around $25.30.

Hi,

I was expecting Sharesight to consolidate my brickworks, does anyone know if that will occur?

The delisting has percolated through the systems so i have now closed out all Brickworks shares at $33.87.

If anything looks off, be sure to let me know.

Thanks for reaching out to us. This corporate action needs to be updated manually on Sharesight.

According to this source, SOL and BKW will be merged to form a new company named Topco, but eventually adopt SOL as their trading ticker.

You receive one new Topco share for every one SOL share held. As the same ticker SOL will be used by the newly formed company, there is no need to take any action on this.

For BKW, use the merge feature to convert your BKW shares to SOL shares at the ratio of 0.82 Topco (SOL) share for every one BKW share held.

@wonkeydonkey I had the same question and recieved this email back from Sharesight:

Thanks for reaching out to us. This corporate action needs to be updated manually on Sharesight. According to this source, SOL and BKW will be merged to form a new company named Topco, but eventually adopt SOL as their trading ticker.

You receive one new Topco share for every one SOL share held. As the same ticker SOL will be used by the newly formed company, there is no need to take any action on this.

For BKW, use the merge feature to convert your BKW shares to SOL shares at the ratio of 0.82 Topco (SOL) share for every one BKW share held.

Please reach out to us if you have any further queries.

Regards,

Roshan

Roshan

Sharesight

Thanks think I pasted my reply from sharesight at the same time as you????