ASX proposes cap on new shares in public merger deals for large companies
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The news: The ASX has proposed that large listed companies face a 25% cap on the amount of new shares they can issue in public merger deals before they must seek a shareholder vote.
The context: Today, the ASX released its consultation paper and exposure draft on shareholder approval of dilutive acquisitions and changes in admission status.
The proposal will apply to companies within the S&P/ASX300 and the ASX believes it will reduce significant dilution in public takeovers as it will allow shareholders to approve higher limits in advance if they choose.
Other proposed changes include:
- Requiring shareholder approval before a listed entity changes an ASX Listing to an ASX Foreign Exempt Listing (FEL); and
- Requiring shareholder approval before delisting where the dual listed entity has a material Australian shareholder base. Existing protections remain where shareholders must vote if their shares cannot be readily tradeable on another exchange.
There were no changes proposed regarding the broader significant transactions framework.
The ASX is seeking submissions on the exposure draft by 29 July 2026.
In October, the ASX sought feedback on whether shareholder approvals should be updated for certain transactions that could have significant impact on shareholders. The ASX had been under fire after listing rules allowed James Hardie’s takeover of AZEK and Southern Cross Austereo’s merger with Seven West Media without shareholder approval.
The source: ASX media release
