Australian Exchange Operator Reevaluates M&A Rules Following James Hardie Backlash

(Cryptonesia) – On Sunday, the Australian Securities Exchange (ASX), which operates as an exchange platform, announced that it has started a procedure to revise its regulations concerning shareholder approval for merger and acquisition activities.

The Australian Securities Exchange decided to examine its listing procedures just one day prior to fibre-cement manufacturer James Hardie announcing it would seek a shareholder vote before reaching any conclusion about altering its presence on the ASX.

"As per our existing ASXListing rules, we must seek shareholder approval for shares issued to directors. This stipulation will remain in place after the completion of the AZEKtransaction," James Hardie stated on Monday.

Recently, a coalition of investors called for an examination of Australia’s listing regulations, contending that it is unjust for firms to be able to issue shares for takeovers without obtaining shareholder consent.

They referenced James Hardie's suggested $8.75 billion purchase of AZEK, stating that this transaction could significantly reduce the shareholding percentage for current investors and change their privileges without obtaining consent through voting.

The investors stated that James Hardie's intention to move its main stock exchange listing to New York following the agreement would reduce the capacity of Australian shareholders to keep the leadership accountable.

The exchange operator mentioned that the controversy around James Hardie's waiver request had sparked greater investor enthusiasm for tightening rules on shareholder approval for significant deals involving publicly traded firms, leading them to initiate a review process.

ASX Chief Executive Officer Helen Lofthouse stated, "We've received feedback from investors—many being shareholders of James Hardie—who desire more influence for stakeholders holding shares in ASX-listed firms. However, we're equally aware that our approach must be carefully considered so that it meets the requirements of the entire marketplace."

James Hardie shares had risen 4.7% by 0026 GMT.

(This story has been updated to correct the name of ASX CEO to Helen Lofthouse in paragraph 8)

(Reported by Rajasik Mukherjee; Edited by Rashmi Aich)