The Australian Stock Exchange (ASX) announced on Sunday that it had started a review of its rules regarding shareholder approvals for mergers and acquisitions.
This move came just a day before fibre-cement manufacturer James Hardie (NYSE: JHX) stated it would hold a shareholder vote before making any changes to its ASX listing status.
James Hardie clarified on Monday that, under the current ASX Listing standards, shareholder approval is required for equity issued to directors. This rule will remain in place after the completion of its $8.75 billion acquisition of AZEK.
A group of investors had recently called for a review of Australia’s listing rules, arguing that it is unfair for companies to issue shares for acquisitions without shareholder approval. They pointed to James Hardie’s planned acquisition of AZEK as a key example. They argued that the deal would significantly dilute the interests of existing shareholders and alter their rights without a vote.
Additionally, investors expressed concern that James Hardie’s intention to shift its primary listing to New York would reduce the ability of Australian shareholders to hold management accountable.
The ASX responded by saying that the outcry over James Hardie’s waiver request had sparked broader interest from investors in strengthening shareholder approval requirements for major corporate transactions. This, in turn, led to the initiation of a review process.
“We’ve heard from investors, including many James Hardie shareholders, who want more influence in decisions involving ASX-listed companies,” said ASX Managing Director and CEO Helen Lofthouse. “However, we are also considering the needs of the broader market as we assess this issue.”
As of 0026 GMT, James Hardie’s shares had risen by 4.7%.
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