It’s been almost six months since Soul Patts (ASX: SOL) merged with Brickworks. Shares initially bounced on the announcement but have since retreated, down 15% from their September 2025 all-time high.

Why it matters: The market’s ebullient reaction to the takeover looked overdone. No new value was created in the deal. Instead, value was transferred between the shareholders of the two businesses.

  • Soul Patts acquired the Brickworks shares it did not already own at a discount to our fair value estimate, though transaction costs largely offset the gain. We think Brickworks shareholders were willing to pay a premium to exit the cross-shareholding that had entangled the two companies since the 1960s.
  • The combined entity is larger, more liquid, and now included in the ASX 50. Investors may have been enthusiastic about greater institutional interest and passive buying, but so far, this has not been enough to support the share price.

The bottom line: The recent pullback brings shares much closer to our unchanged $35 fair value estimate, with no-moat Soul Patts now a 3-star stock.

  • We value Soul Patts as the sum of its parts: long-term strategic holdings in New Hope and TPG, a diversified public equity portfolio, and alternative assets including private credit and property.
  • TPG and New Hope are undervalued. But many of the largest holdings in the public equity portfolio, including BHP, Macquarie, and Wesfarmers, are overvalued. It broadly nets out.

Coming up: Soul Patts releases first-half fiscal 2026 financials on March 26, 2026, its first result since the Brickworks acquisition.

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Terms used in this article

Star Rating: Our one- to five-star ratings are guideposts to a broad audience and individuals must consider their own specific investment goals, risk tolerance, and several other factors. A five-star rating means our analysts think the current market price likely represents an excessively pessimistic outlook and that beyond fair risk-adjusted returns are likely over a long timeframe. A one-star rating means our analysts think the market is pricing in an excessively optimistic outlook, limiting upside potential and leaving the investor exposed to capital loss.

Fair Value: Morningstar’s Fair Value estimate results from a detailed projection of a company’s future cash flows, resulting from our analysts’ independent primary research. Price To Fair Value measures the current market price against estimated Fair Value. If a company’s stock trades at $100 and our analysts believe it is worth $200, the price to fair value ratio would be 0.5. A Price to Fair Value over 1 suggests the share is overvalued.

Moat Rating: An economic moat is a structural feature that allows a firm to sustain excess profits over a long period. Companies with a narrow moat are those we believe are more likely than not to sustain excess returns for at least a decade. For wide-moat companies, we have high confidence that excess returns will persist for 10 years and are likely to persist at least 20 years. To learn about finding different sources of moat, read this article by Mark LaMonica.