ASX to review listing and waiver rules after James Hardie deal: reports
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The news: The ASX plans to review the requirements for shareholder approvals in mergers and acquisitions, after James Hardie Industries Plc’s $14 billion deal to take over AZEK Co last month spurred backlash from superannuation funds and asset managers.
The context: First reported by the AFR, the ASX’s plans to review its rules came after meetings between the exchange’s chief executive Helen Lofthouse and investors in the Hardie-AZEK deal, which include AustralianSuper and UniSuper.
According to media reports, the ASX said Australian institutional investors had voiced concerns about current shareholder approval requirements and that the exchange would update an analysis from 2017. The review will be first step toward a “review of shareholder approval requirements,” including the circumstances in which companies need to disclose a waiver from the listing rules.
Lofthouse said in the statement that investors have made it clear “they want a greater voice for shareholders invested in ASX-listed companies. But we are also mindful that we need to examine this question in a way that ensures we serve the needs of the market as a whole.”
According to the exchange, the call to launch a review came after the ASX received a wave of inquiries over its decision to allow James Hardie to proceed with the purchase of home-decking provider AZEK without gaining shareholder approval.
Late last week, Treasurer Jim Chalmers directly raised with ASX chairman David Clarke the exchange’s decision to let James Hardie shift its primary listing without a shareholder vote, but signalled he is reluctant to intervene despite widespread investor anger.
The ASX gave little detail on why it waived the usual shareholder vote, typically required when more than 15% of stock is issued.
