Terem Capital's Scott Middleton joins Adam and Adir on Soul Patts: the Brickworks cross-holding, New Hope coal, turning NBN Television into TPG, and whether 26x earnings is too much to pay.
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From one Pitt Street chemist to $17.5B, and almost nobody’s heard of it
Caleb Soul and his son Washington opened a pharmacy at 177 Pitt Street, Sydney, in 1872. Lewy Pattinson opened his own in Balmain in 1886, bought out Soul in 1902, and Washington H. Soul Pattinson listed in January 1903 with 21 pharmacies. It is Australia’s second-oldest listed company and has had only four chairmen from the same family line: Lewy, his son William Pattinson, grandson Jim Millner (1969–1998) and great-grandson Rob Millner, chair since 1998. Soul Patts (ASX: SOL) now trades around $46 a share, a market cap of roughly $17.5B. Terem Capital’s Scott Middleton joins Adam and Adir for the deep dive.
Adam: “It’s a name that surprisingly I don’t think many people recognise, despite probably being one of Australia’s best-performing businesses of the last hundred-plus years. It’s an $18 billion business that I reckon 95% of Australians, even people listening to the pod who are super smart, may not have heard of.”
Scott on Jim Millner’s first big deal, a distressed lender: “They were borrowing on one side, then lending it out to property projects, and earning a bit on the spread of the interest. Sounds like a private credit firm.”
Scott: “In reading this, I’m like, wow, this Jim guy is fantastic. I’d love to have had a conversation with him.”
Bricks, a poison pill and a mine they called No Hope
In 1969 Soul Patts and building products maker Brickworks took large stakes in each other to keep corporate raiders out. The structure saw off Guinness Peat Group’s bid for Brickworks in 2000 and years of pressure from Perpetual, including Federal Court action in 2014. It was finally unwound by a $14B merger announced in June 2025 and completed that September; at the time Soul Patts owned 43% of Brickworks and Brickworks 26% of Soul Patts. In the 1970s Jim Millner also bought a Queensland coal miner known in-house as the “No Hope Colliery”. New Hope listed separately in 2003 (ASX: NHC), and Soul Patts remains its major shareholder.
Adam: “This is back from the Holmes à Court, John Elliott corporate raider days, when people were scared of being taken over. This is like the ultimate poison pill.”
Adir: “People don’t often talk about bricks because they’re quite boring, but it is a great business. Bricks are cheap and they’re heavy, and no one’s going to import them from China.”
Scott on the 1970s mining fund prospectus: “You could almost replace it with a VC or a PE firm doing a fundraise around AI or software at the moment. This was mining.”
Adir: “You go to this barbecue and it’s like, what are you involved in? And the answer is coal. Someone’s going to go talk to the next person, right? But this is a gold mine.”
Selling the same TV station twice, then riding TPG for 18 years
Soul Patts owned Newcastle’s NBN Television from the 1980s. In 2004 it sold NBN to its own listed subsidiary, SP Telemedia, for $145M. In 2007 SP Telemedia sold NBN and its production business to James Packer’s PBL Media for $250M. A year later David Teoh’s TPG reverse-merged into SP Telemedia, which was renamed TPG Telecom in 2009. TPG merged with Vodafone Hutchison Australia in 2020 and sold its fixed enterprise, government and wholesale business to Vocus in 2025. Soul Patts has since sold out of TPG completely, including a $245M block of 61.5M shares, and Rob Millner has retired from the TPG board.
Adam: “They took that original $37 million in ‘89 and turned it into $250 million by 2007. This is what these guys seem to do time and time again.”
Adir: “He’s a good guy to be the counterparty. I like that guy. What’s he selling now?”
Scott: “This is where these huge results are coming from. They’re not trying to get something off in three years.”
Adam: “These guys are the masters of finding unloved assets.”
The best business in Australia at 26x earnings and zero Powers
For the year to 31 July 2026, Soul Patts reported pre-tax net asset value of $13.7B ($14.5B post-tax), net cash flow from investments of $572M and its 28th consecutive year of dividend growth. Its 25-year total shareholder return is 12.8% a year against 8.4% for the ASX200. The 2021 merger with Milton Corporation lifted it into the ASX 50. At around $17.5B in market value, it trades above that net asset value.
Adam: “It’s probably my favourite business in Australia. But even I’m not sure I could justify it at this price. Would the fund manager that is Soul Patts buy Soul Patts at 27x? I don’t know.”
Adir: “If you want to buy this business, you have to pay a price that feels expensive but will feel cheap twenty years later.”
Adir on Hamilton Helmer’s 7 Powers: “Could a crappy chairman or CEO that took over ruin this business? Pretty quickly. And so I think you’re really betting on leadership in this business.”
Adir’s sales pitch: “In specie half the value of this business to shareholders and shrink down. It gets harder and harder to make money as you get bigger. Go and be smaller again so you can go back to buying the stuff that you know best.”
Scott: “This is the hard bit. You found something you like, and you’ve got to sit and not do anything.”
Thanks for reading! And to Scott and the team at Terem Capital for sponsoring today’s episode. Make sure to check them out on their own substack at the link below.
