Australia's ASX proposes 25% cap on share issuance in public M&A without shareholder vote

SYDNEY - The Australian Securities Exchange will introduce major new changes that cap companies from issuing more than 25% of their existing share capital to fund public takeovers without a shareholder vote, bowing to pressure from investors concerned about becoming diluted in corporate buyouts.

The draft new rules published Wednesday reduce the number of shares companies in the S&P/ASX300 index can issue from 100% of their capitalisation to 25% before seeking shareholder approval.

The ASX launched a review last year after James Hardie was given a waiver from the stock exchange making it exempt from a shareholder vote when it issued about 35% of its shares to fund the $8.8 billion takeover of AZEK.

"We have listened to the market, and have  heard loud and clear the  market's support for more  protections against share dilution in public takeovers and mergers," said Gavin Skene, the ASX's Acting Group Executive, Listings.

James Hardie shareholders were angered their investments were diluted by the company issuing a large number of shares without seeking approval before the deal proceeded.

The building products company chair Anne Lloyd and two directors were voted off the board by investors frustrated by the way the takeover was handled by the Australian-listed firm.

(Reporting by Scott Murdoch in Sydney and Roshan Thomas in Bengaluru; Editing by Rashmi Aich and Stephen Coates)

Copyright Reuters or USA Today Network via Reuters Connect.

This story was originally published June 16, 2026 at 10:29 PM.