ASX’s revised rules on shareholder approval for dilutive acquisitions take effect on 21 October, following confirmation of regulatory clearance in its 14 October notice. For corporate brokers and transaction advisers, the change adds an approval consideration to the structure and timetable of large equity-funded takeovers and mergers.[1]
For S&P/ASX 300 companies, the takeover and merger exceptions to the ordinary share-issuance rules are unavailable once a transaction reaches the prescribed threshold, normally 25%. The calculation includes securities issued as acquisition consideration and those issued to fund cash consideration, measured against fully paid ordinary securities outstanding when the transaction is announced.[2]
This is a test of the equity issued for the transaction. It is not expressed as a percentage of the target’s value or the purchaser’s assets. ASX can aggregate separate issues that form part of the same commercial transaction, making the combined funding plan relevant.[2]
Shareholders can approve a higher threshold through the specified ordinary resolution or a constitutional amendment approved after listing. The resolution route lasts up to 36 months, ending earlier after specified major-transaction approvals.[2]
The transition provisions preserve the prior rules for transactions publicly announced before commencement. However, a material change after commencement can bring an earlier deal into the new framework if it is substantively a new transaction. A fresh approval under the new threshold rule can only be obtained at a meeting held on or after commencement.[3]
ASX has also aligned the post-approval issuance window for reverse takeovers with the 12-month period for the newly defined prescribed transactions. It retained the shorter three-month period for general issuances, explaining that these ordinarily do not depend on the same court, regulatory or overseas approvals.[3]
For advisers working on an existing deal, the transition test makes a substantial renegotiation more consequential than a routine timetable update. Its approval treatment may need to be revisited if changed terms make it a new transaction. That consideration belongs in financing and execution planning alongside the commercial renegotiation.[3]
Sources & further reading
- Notice 1204.26.10: New Listing Rules and Guidance Notes on dilutive acquisitions and admission status ASX · 14 Oct 2026 · Accessed 21 Oct 2026
- Amendments to ASX Listing Rules: shareholder approval of dilutive acquisitions and admission status ASX · Accessed 21 Oct 2026
- Shareholder approval of dilutive acquisitions and changes in admission status: response to consultation ASX · Accessed 21 Oct 2026