ASX launches review of listing rules after James Hardie investors denied merger vote | The Business
The ASX has responded to growing anger among Australia’s biggest institutional investors, over its decision to allow James Hardie, a global building materials company listed on the S&P/ASX 200, to proceed with a merger with American outdoor living company AZEK, without first consulting Australian shareholders. Portfolio manager at Allan Gray Australia, Suhas Nayak, says the decision is another example of the “big hole” in ASX listing rules, which allow shareholder interests to be diluted without their approval.
Mr Nayak explained the impact of the ASX decision in this way: “imagine if you were a owner of an investment property and you had a real estate agent looking after your investment property. One day, the real estate agent said to you, ‘I’ve done a deal, a great deal, with a neighboring property, and you end up with 75% of that combined property, and you don’t get a vote’.”
Allan Gray Australia is not a shareholder of James Hardie, but is one of many signatories to an open letter to the ASX, demanding change.
While announcing a review of the current rules, the ASX said it was mindful that by giving shareholders a say on mergers and acquisitions, listed companies are at risk of competitive disadvantage to unlisted ones.
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