James Hardie is facing potential shareholder unrest at its upcoming annual general meeting (AGM) following its $14 billion acquisition of Azek in the US and a subsequent downgrade in the company’s outlook. Materials released overnight reveal that several board members, including Chairwoman Anne Lloyd, are up for re-election at the meeting scheduled for October 30th. The company is domiciled in Ireland.
Citi analyst Samuel Seow noted that while James Hardie is not subject to Australia’s two-strike rule, the re-election of a majority of the board, coupled with outlined targets for total shareholder returns, may lead to increased friction with investors. James Hardie specialises in manufacturing and distributing fibre cement and gypsum building products.
The analyst pointed out that the targets outlined suggest a somewhat subdued outlook for the business. This comes at a sensitive time, given the significant board re-election process. James Hardie aims to deliver differentiated solutions to the construction industry globally.
Investor sentiment appears to be wavering after the expensive buyout and the tempered outlook. The AGM will be a key event to gauge shareholder confidence in the company’s direction and the current board’s leadership.
