BHP Billiton activist's changes need to pass Australian 'national interest test'

Apr 13, 2017, 01:31
BHP Billiton activist's changes need to pass Australian 'national interest test'

BHP said it's been in talks with the hedge fund for many months, and the costs and risks associated with the proposals outweigh the benefits.

".[I] ts intrinsic value is being obscured by bundling it with BHP's other assets", Elliott said.

"We have had dialogue with Elliott over many months, consistent with our commitment to shareholder engagement", BHP says.

But BHP Billiton said the plan's cost to boost shareholder value would be too high to have any real benefit.

That would create a single Australian-headquartered firm that would retain BHP's current stock market listings and keep them in Sydney's and London's benchmark share price indices, according to Elliott.

Since the formation of the dual listing in 2001, BHP says it has returned to shareholders $US23 billion in buybacks and $US56 billion in cash dividends.

BHP Billiton should jettison its US petroleum business (offshore and on), which is undervalued by the market, does not contribute value to the company and does not mesh with BHP's traditional mining operations, an activist shareholder said Monday in a letter to company directors. Elliott claims that after the demerger of BHP's non-core assets into South32, the London legal entity now generates just 10.3% of revenue.

Elliott also proposed that BHP Billiton split off its US oil and gas division, a move the company has rejected previously.

Australia's Treasury department has warned that any of the major changes to BHP Billiton's corporate structure proposed by activist fund Elliott Management would need to be in the country's national interest.

The activist fund said it holds 4.1 per cent of BHP's UK-listed stock and rights for another 0.4 per cent of the Sydney-listed BHP Billiton Ltd shares. PNC Financial Services Group Inc. now owns 4,700 shares of the mining company's stock valued at $142,000 after buying an additional 3,964 shares during the period.

Splatoon 2, ARMS-focused Nintendo Direct to take place this week
Following the success of the first title, Splatoon 2 is shaping up to be one of the best offerings on the Switch. Switch owners have already had the chance to preview the game firsthand thanks to the Testfire event in March.

North Korea says Syria airstrikes prove its nukes justified
The pro-independence Liberty Times said Trump was "shaking hands with Xi Jinping with his left hand and launching missiles with his right" to pressure China to rein in North Korea.

Mets' Noah Syndergaard leaves Opening Day with blister on finger
Days before the first pitch, a Quinnipiac University poll showed NY baseball fans preferred the Mets over the Yankees, 45% to 43%. What Manager John Farrell said has impressed him most about 22-year-old during his short time in the majors is the lack of panic.

In blue-chip risers, shares in BHP have been in demand after Elliott Advisors sent a letter to the miner proposing a plan, involving scrapping the miner's London listing, demerging its U.S. oil unit and revising its capital return policy.

BHP lowered its dividend for the first time in 15 years in February 2016 amid weaker commodities prices and scrapped a guarantee of continually rising returns.

Elliott's letter was released late in the day and the jumped in the last half hour of trading on the Australian share market on Monday.

Others remain cautious. Prices of commodities including iron ore and coking coal are likely to fall as much as 40 percent over the next three years as demand peaks, according to Dion Hershan, managing director and head of Australian equities at Melbourne-based Yarra Capital Management.

"We already value the U.S. (conventional and onshore) oil operations at premiums to listed peers", Mr Fitzpatrick said.

In a note to clients, Shore Capital analyst Yuen low said: "We find ourselves coming down on BHP's side of the argument. BHP should embrace a broadening of the discussion to include all shareholders", the hedge fund said.

Any separation of the petroleum business would mark a shift from the recent strategy under BHP CEO Andrew Mackenzie, who has been in his post for almost four years.

Third, BHP would "monetise" its excess franking credits by buying back $US33 billion of its shares from investors over five years.

Taking into account exploration costs, Morgan Stanley values the U.S. operations at $US18 billion ($24 billion), compared to Elliott's ambitious $US22 billion ($30 billion) valuation.

  • Pearl Jam, Tupac, Yes, Journey to be inducted into Rock Hall

    Pearl Jam, Tupac, Yes, Journey to be inducted into Rock Hall

    Speaking exclusively to ABC Radio Friday night, Perry said the support of Journey fans over the years means everything to him. Now that Pearl Jam is being inducted into the Hall of Fame, Ament and Schultz are reflecting on their career too.
    1 dead, 2 injured in shooting at Village of Merrick Park

    1 dead, 2 injured in shooting at Village of Merrick Park

    Police said the shooter is dead, The Miami Herald reported - and it is believed that he committed suicide after firing his gun. The wounded included the general manager Janine Ackerman and a trainer named Mario Hortis, the witnesses said.

    Why You Need a Samsung Galaxy S8 Case

    Verizon also stated that those who are opting for pre-orders will get the Gear VR with controller and Oculus content pack. This is a charger that can lay flat, or stand up to work as a dock for your new smartphone.
  • Michail Antonio's West Ham contract talks at a standstill

    While the top four hopes may be waning for Arsenal, they still have to try to finish as high as possible in the table. Within hours of the result, the West Ham board had issued a statement declaring "100 per cent faith" in the Croat.
    Richmond Fed President Jeffrey Lacker resigns, admits to leaking confidential information

    Richmond Fed President Jeffrey Lacker resigns, admits to leaking confidential information

    The Richmond Fed said in a statement that Mr Lacker will be replaced in an acting capacity by first vice-president Mark Mullinix. The Richmond Fed is one of 12 regional reserve banks that are part of the USA central bank.
    Canadian Babies Cry More Than Infants In Other Countries

    Canadian Babies Cry More Than Infants In Other Countries

    In contrast just 5.5 per cent of Danish babies cry for more than three hours a day, and only 6.7 per cent of German babies. Colic has always been defined as infant crying that lasts longer than three hours a day for at least three days a week.
  • One For Arthur wins Grand National for the 'Two Golf Widows'

    One For Arthur wins Grand National for the 'Two Golf Widows'

    Arthur and jockey Derek Fox never really put a foot wrong. "I don't often get a chance to ride a horse as good as that". The 8-1 favourite Blaklion, who led for much of the contest, was fourth.

    Wall Street closes lower as Federal Reserve considers trimming its balance sheet

    The central bankers now expected President Donald Trump's plans for expansionary fiscal policy would likely not begin until 2018. US stocks SPX, +0.56% pared gains after the release of the minutes, and the yields on government bonds TMUBMUSD10Y, +0.30% rose.

    IRS to use private debt collectors amid huge telephone scam

    And they "must be courteous and must respect taxpayer rights", according to the agency. "Here's a simple rule to keep in mind". The IRS looks at the taxpayer's income and assets to make a determination regarding the taxpayer's ability to pay.
  • Rock Hall 2017 class includes Pearl Jam, Tupac and Journey

    Like Shakur and Pearl Jam , Baez and ELO were all elected in their first year as nominees. The late rapper is in the 2017 class to be inducted into the Rock and Roll Hall of Fame.
    Texas House budget debate extends into evening

    Texas House budget debate extends into evening

    Democrats, meanwhile, wouldn't cooperate unless the plan added fresh money for social service programs and full-day kindergarten. Diego Bernal , D-San Antonio, would cut $7.5 million from the Department of Public Safety budget to pay for public schools.
    Canadian auto sales post record gains through March

    Canadian auto sales post record gains through March

    In related news, Chairman William Clay Ford , Jr. acquired 171,379 shares of the stock in a transaction dated Friday, March 24th. In February, auto sales remained flat amid incentive-splurge and the bump up provided by the President's Day holiday weekend.