The chair of James Hardie, Anne Lloyd, has been dumped by shareholders of the building materials company, paying the price for the controversial $14 billion merger with US group Azek, which went ahead without an investor vote. Seldom does a chair get dumped like Lloyd did yesterday, but she was defiant until the end, saying the Hardie-Azek deal will build long-term value for shareholders. Lloyd and two other directors were voted out. All four major proxy firms who cover James Hardie called for Lloyd to be dumped, and they got their wish.

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News in brief

US President Donald Trump and Chinese President Xi Jinping held a 100-minute meeting yesterday afternoon which Trump called “amazing”. China agreed to increase efforts to curb the export of precursor chemicals used to manufacture fentanyl, while the US will cut fentanyl related tariffs from 20 per cent to 10 per cent. China also paused a rare earths licensing regime for at least a year. Ahead of the meeting, Trump announced he had instructed the US Department of War to accelerate its nuclear weapons testing.

Coles has recorded a much bigger jump in sales than archrival Woolworths, saying supermarket revenue was up 4.8 per cent to nearly $10 billion in the September quarter. Woolworths' supermarket sales were up 2.1 per cent to $15 billion. Coles has the growth momentum while Woolies has the size.

Wesfarmers yesterday held its annual general meeting and it emerged that staff across Bunnings, Kmart, Officeworks and Priceline pharmacies experienced more than 13,500 threatening incidents from customers in the past year. Bunnings alone reported a 66 per cent rise in aggressive behaviour.

The US Federal Reserve cut interest rates yesterday morning, but Chair Jerome Powell made it very clear that another reduction is not a foregone conclusion. As he put it: “If you are driving in the fog, you slow down.” The news was somewhat overshadowed by solid profit results from Meta, Microsoft and Alphabet, and the fact that chip maker Nvidia become the world’s first company to have a market capitalisation of $US5 trillion.

The Australian Financial Review’s Young rich list has been released, ranking the wealthiest under 40-year-olds in the country. Canva co-founders Melanie Perkins and Cliff Obrecht come in at number one. That’s six years in a row at the top, and the pair are worth $18.5 billion.

Fear-o-meter

Anne Lloyd and two other James Hardie directors deserved to be dumped by shareholders.

A quick recap. James Hardie merged with US-based Azek without a shareholder vote. Since the announcement, Hardie’s share price is down 15 per cent. Over the past nine months it is off 35 per cent.

James Hardie is listed on the ASX but domiciled in Ireland, which is where yesterday’s 17-minute AGM was held.

Not only did the James Hardie board do a merger without going to a shareholder vote, it also downgraded earnings subsequent to the deal, and just three days after the CEO’s long-term incentive was cashed out, at the pre-downgrade share price.

Also, ahead of the vote yesterday, Lloyd did not travel to Australia to talk, face-to-face, to long-term Hardie shareholders. James Hardie might operate mostly in the US, but its shareholders are mostly Australian.

James Hardie didn’t listen to shareholders and three members of the board got shafted. They deserved it.

Fear & Greed Q+A today

On the business of movies, including the growth of IMAX in Australia, the value of working with filmmakers like Christopher Nolan and James Cameron, and the resilience of the industry:

"I've learned that everybody has always predicted the end of cinema. If you look at the headlines on some papers from decades ago, first, it was the advent of television, that it was VHS. More recently, it was streaming, then it was COVID, then it was the strikes. And yet again, the industry is still here, extremely resilient, exactly because people like that shared communal experience. You can't replicate that at home. So it's there and the demand is very, very healthy. Of course it changed. I think consumers are getting more more demanding now, more than ever before. I think they need a reason to get out of their very comfortable living room with very big televisions and comfortable sofas. We give them that reason. It needs to be a highly differentiated, highly special experience."

Greed-o-meter

This week OpenAI confirmed it would give long-time backer Microsoft a 27pc stake in the company. The deal values OpenAI at $US762 billion. OpenAI isn't listed - if it was, it would be the 14th largest company on the NYSE.

Source: TradingView

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