ASX puts 25% cap on new share issuances during mergers

The ASX has put a 25% cap on the amount of new shares large listed companies can issue during mergers without first getting shareholder approval.

"This gives shareholders a say before significant dilution. Shareholders are also given flexibility to increase this cap via their constituent documents or with shareholder approval," ASX said.

It said the capping is applicable on ASX 300 companies and will reduce significant dilution in public takeovers, while allowing shareholders to approve higher limits in advance if they choose.

ASX acting group executive of listings Gavin Skene said: "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."

He noted submissions also consistently said shareholders should have a vote on enduring changes to a company's listing status and ASX needed changes that delivered execution certainty and predictable, non-discretionary rules.

"With these revised settings, ASX has balanced shareholder protection and market integrity with transaction and execution certainty ensuring the ASX remains an internationally attractive listing venue that supports company growth and productivity," Skene said.

ASX has also proposed shareholder approval before delisting where the dual listed entity has a material Australian shareholder base. Existing protections remain where shareholders must vote if their shares cannot be readily tradeable on another exchange, it said.

It also proposes shareholder approval before a listed entity changes an ASX listing to an ASX foreign exempt listing (FEL).

ASX is seeking submissions on the exposure draft until July 29.

In October 2025, ASX sought feedback on whether shareholder approval should be updated for certain transactions that can have a significant impact on shareholders. It received 45 submissions from asset managers, industry bodies, law firms, investment banks and listed entities.