The Fin How a $14 billion deal can happen without a shareholder vote
May 7, 2025
James Thomson, a knowledgeable Chanticleer columnist for the Australian Financial Review, is joined by Joyce Moullakis, an Associate Editor covering corporate deals. They dive into the controversial $14 billion acquisition by James Hardie that occurred without shareholder voting rights. The discussion highlights investor backlash and the implications for corporate governance. They emphasize the need for transparency and shareholder participation, as major fund managers push back against the perceived disenfranchisement and call for rule revisions in the ASX.
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Shareholder's Investment Property Analogy
- A shareholder compared James Hardy shareholders' feeling to owning a house managed by an agent who merges it without their vote.
- The neighbor gets a vote, but they don’t, showing shareholders’ frustration about no say in the deal.
James Hardy Deal Shocks Investors
- James Hardy's $14 billion deal to buy ASEC shocked investors due to overpayment and poor timing.
- This deal broke 15 years of strategy, causing a nearly 15% share price drop on announcement day.
James Hardy's Troubled Past & Reputation
- James Hardy has a troubled history including asbestos compensation battles and tax-driven headquarters relocations.
- Despite longevity and recent discipline, its reputation remains tainted and cyclicality attracts volatile investor interest.