• 01 / 04
    2020

    Open season for IBs and takeovers by stealth: Emergency capital raising relief

    ASX and ASIC have announced “Temporary emergency capital raising relief”. The relief, which expires at the end of July 2020, provides for placement capacity of 25% where a raising is conducted alongside an entitlement offer or SPP. The relief, if used, will result in significant dilution for some – particularly retail shareholders and institutional shareholders not invited to participate – or where the entitlement offer is small. Control implications of capital raisings are also exacerbated – a 19.99% placement combined with sub-underwriting could result in a single holder having a position beyond 30%. A “supersized waiver” can also be used which would increase the placement capacity to 50% where a one-for-one entitlement offer is undertaken. The liberal nature of the relief places the onus on boards to ensure raisings are conducted fairly – and not merely in a way suiting investment banks and their favoured clients. The report can be downloaded by clicking on the following link:

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  • 26 / 03
    2020

    Declared dividend trends and updates

    In turbulent markets, some companies are cancelling or suspending dividend payments to protect balance sheets Across the S&P/ASX 300 dividends announced but not paid as at March 25th totalled ~$17.6bn, and the ability to cancel such payments may be a key source of funding for many companies To date dividends worth $404mn have been cancelled, $384mn deferred and $16.7bn remain ‘payable’ Under s.254T of the Corporations Act, a solvency test is outlined when considering a company’s dividend payment. Interim dividends can typically be cancelled. Some companies that are raising capital have yet to announce dividend cancellations or suspensions, including OML, SXL and WEB (ex-date 25th March). A data table with the status of ASX 300 company dividends announced, but yet to be paid can be provided The report can be downloaded by clicking on the following link:

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  • 24 / 03
    2020

    Lessons from GFC capital raisings: implications in the current environment

    Capital raisings that took place during the GFC contain many lessons in the current environment. • GFC capital raisings revealed a preference for placements rather than entitlement offers • Some placements were made on expanded (post raising) capital bases where undertaken alongside entitlement offers and led to dilution of up to 30% • Issue price discounts were largest when raising capital to pay down debt • Fees paid to underwriters didn’t always appear to reflect genuine underwriting risk • Beware sub-underwriting by strategic shareholders that has control implications Preferred structure for capital raisings is accelerated renounceable entitlement offers, timetable was significantly shortened by ASX in 2014 and should be the starting point for non-distressed raisings. The report can be downloaded by clicking on the following link: Further reading on the GFC capital raisings is available here and post GFC capital raisings is available here.  

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  • 07 / 03
    2018

    Key Audit Matters

    For financial periods ending after 15 December 2016 the auditor has a responsibility to communicate key audit matters (KAM) in the audit report. This disclosure for listed companies has now been a requirement for a year, so all companies have at least one set of accounts with KAMs specified. OM analysed 290 KAM disclosures for ASX 300 companies during 2017 to observe trends and identify any companies where the audit matter may provide insight for investors. KAMs can provide users of financial statements with hints as to areas of disclosure that may warrant further investigation or seem otherwise innocuously disclosed. Examples include: 1. Austal (ASB) 2. Graincorp (GNC) 3. Steadfast (SDF) 4. Sky Network Television (SKT) 5. Blue Sky Alternatives (BLA) 6. Domino’s Pizza (DMP) 7. Fairfax (FXJ) / Nine Entertainment (NEC) 8. Myer Limited (MYR) The report can be downloaded by clicking on the following link:

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  • 24 / 02
    2016

    Review of 2015 general meeting outcomes

    OM’s annual review of meeting outcomes across the S&P/ASX 300 reviews increased signs of investor willingness to oppose board-endorsed directors with incumbent directors at three companies resigning immediately prior to the annual meeting presumably in the face of significant investor opposition. The number of ‘strikes’ on remuneration report resolutions also increased slightly, from 16 across the S&P/ASX 300 in 2014 to 19 in 2015. The ongoing phenomenon of management narrowly avoiding defeat also continued.  

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  • 22 / 02
    2016

    Back to the dark ages with $2.5bn placement

    ASX Corp Governance: ANZ lags NAB with a dinosaur $2.5bn insto placement rather than rights issue (NAB was $5.5bn rights). Placement/SPP aims to “quickly” raise capital, which is actually required by APRA before July 2016. Click here for the full article  

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  • 22 / 02
    2016

    Why should executives get half their performance linked pay, merely for median performance?

    June 2015 results are mostly complete and AGM season is around the corner. This means increased focus on executive remuneration, as these days the “rem report” is a key resolution at each ASX listed AGM. Click here for the full article

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  • 18 / 12
    2015

    ASX submission: Review of approvals required for reverse takeovers

    Read OM’s submission to the ASX’s call for consultation on whether it should introduce a rule making ‘reverse takeovers’ – where the ‘bidder’ shareholders end up with less than half the merged company – conditional on bidder shareholder approval. ASX is rare among global peer exchanges such as the LSE, HKEx, SGX and NYSE in not requiring any bidder shareholder approval in this situation. The submission can be downloaded by clicking on the following link:

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  • 04 / 12
    2015

    Submission to ASX Listing Rule Review

    Read OM’s submission to the ASX’s review of Listing Rule 7.1A which allows smaller companies to conduct larger dilutive capital raisings than those in the S&P/ASX 300. OM has recommended ASX provide the market the same detail on participants in raisings under Rule 7.1A as it receives. To download a copy, please click on the following link:

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  • 11 / 02
    2015

    2014 voting results summary: S&P/ASX 300

    This report summarises key themes from the results of all resolutions at securityholder meetings of S&P/ASX 300 entities in 2014.

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  • 25 / 08
    2014

    A taxing time: a review of tax disputes in the ASX 200 – 2013/4

    This comprehensive report reviews all disclosed tax disputes on foot with ASX 200 companies, highlighting the $711 million in earnings at risk.

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  • 15 / 12
    2013

    The cost of remuneration advice in the S&P/ASX 200

    In a report prepared by Ownership Matters, the pay data for remuneration consultants is compiled and analysed, along with the regulatory regime that governs the disclosure of remuneration advice.

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  • 18 / 10
    2013

    Capital raisings 2013 – too much is never enough

    Ownership Matters compiled and analysed capital raising data for every company in the S&P/ASX 300 in the post-GFC period (2010 to 2012).

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  • 25 / 09
    2013

    CEO Pay in the S&P/ASX 200 in 2012

    Ownership Matters compared chief executive pay across the S&P/ASX 200 for the 2012 financial year in a report commissioned by the Australian Council of Superannuation Investors.

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  • 25 / 09
    2013

    Board composition and non-executive director pay in the S&P/ASX 200

    The 2012 board composition study, prepared by Ownership Matters and commissioned by the Australian Council of Superannuation Investors, is the 12th annual review of board composition and non-executive director fees in Australia’s largest listed companies. Overall, the study found that S&P/ASX 200 boards are becoming more diverse, a little greyer over time and an increasing number of directors are being selected to serve on boards for the first time in their careers.

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  • 28 / 04
    2013

    Litigation watch: material litigation in the S&P/ASX 300

    Ownership Matters prepared the first report of its type on litigation risk across the S&P/ASX 300 at December 2012.

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  • 26 / 03
    2013

    While you were sleeping: On-market share purchases for employees

    Ownership Matters investigated the listed company practice of buying shares on market to fulfill employee equity schemes and catalogued the cost to companies and the impact on shareholders in the context of minimal, delayed, disclosure by companies.

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  • 10 / 03
    2013

    Wrong Way, Turn Back: Pay in the Contracting Sector in 2012

    A detailed study of the pay practices of listed companies engaged in construction and contracting in the S&P/ASX 200. Contact us for a copy.  

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  • 19 / 10
    2012

    Institutional proxy voting in Australia in 2012

    In a report commissioned by the Australian Council of Superannuation Investors, Ownership Matters comprehensively reviewed the voting system in Australia in 2012.

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  • 12 / 10
    2012

    Waiting for Godot? Executive Pay Alignment in the Property Sector in 2012

    Ownership Matters forensically examined the sectoral trends and misalignment of pay practices across the A-REIT sector over the past 5 years. To download the report, click on the following link:  

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