The Federal Court of Australia has dismissed Perpetual’s claim that Brickworks had engaged in oppressive conduct, including by reason of the existence of its cross-shareholding structure with Washington H. Soul Pattinson (WHSP).
Justice Jagot found that “reasonable directors would not consider, maintenance of the cross-shareholding to date to be unfair or oppressive. Accordingly, Perpetual’s claim must be rejected.”
The company said that the judgement, that was favourable to WHSP, followed a public agitation campaign by Perpetual involving multiple flawed proposals, over several years.
During this period, according to WHSP, Perpetual made a profit on its investment in the company by selling down its position from over 12 per cent to less than a substantial holding.
Brickworks, which welcomed the court’s decision to reject Perpetual’s claim, said that under the verdict Perpetual had been ordered to pay costs to both WHSP and Brickworks.
Brickworks’ lead independent director, Robert Webster, said: “We welcome today’s decision and hope that this distracting litigation and unnecessary cost will now be behind us”.
“We firmly believe that the cross-shareholding structure benefits shareholders – a fact clearly demonstrated by Brickworks’ superior performance to the All Ordinaries Accumulation Index which has increased 10.5 per cent per annum over the past 48 years compared to Brickworks ‘ 11.9 per cent total shareholder returns.
“We are pleased that Justice Jagot has concluded that on any reasonable view of the evidence, the directors of Brickworks have diligently considered the structures of the companies with their obligation to act in the best interests of Brickworks firmly in mind,” he said.
According to WSHP, the litigation was “an unnecessary distraction for the board and management of WHSP and extremely costly for all parties”.
