BHP rises after activist investor urges reform

The big four banks lead the bourse higher followed closely by utilities and consumer staples while healthcare stocks

The world's biggest miner BHP Billiton (AU:BHP) has rejected activist shareholder Elliott Funds' proposal to demerge its U.S. oil business and end its dual listing to resolve "value inefficiencies".

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 USA oil unit and revising its capital return policy.

'Unfortunately, despite the progressive and successful demerger of South32 in May 2015, BHP's management still can not deliver optimal shareholder value without resolving the shareholder value inefficiencies caused by its dual-listed company structure; monetising the intrinsic value of BHP's USA petroleum business, the value of which is being obscured by its continued inclusion within the group; and enhancing capital management to an optimal level, ' Elliott said.

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

It their assessment of Elliott's proposal, Wall Street Journal reporters Scott Patterson, David Benoit and Robb M. Stewart note that Elliott, managed by Paul Singer, first contacted BHP management a year ago, has participated in the shakeup of Samsung Electronics and is trying to oust the chief executive of Arconic (ARNC), the former USA aluminum giant Alcoa.

BHP shares rose by 3.5% in NY overnight and by 2.2% in London, after gaining 4.6% to A$25.73 in Australia yesterday.

BHP said there was "no obvious discount" in its share price due to its USA petroleum assets, which Elliott believes does not fit with BHP's top-tier mines and would be better off in a stand-alone entity.

More news: Windows Vista is officially dead
More news: RSS chief Mohan Bhagwat wants cow slaughter ban across India
More news: Congress seen as not likely to pass tax overhaul quickly

"I think BHP has probably been asked 10 times in the last 15 or 17 years to unwind the (dual-corporate structure)", the fund manager said.

Elliott's proposal argued BHP should be an Australia-headquartered firm paying Australian taxes to eliminate the trading value mismatch between the two lines of shares and optimise the value impact of share buybacks.

The price-to-book ratio of the Bloomberg World Mining Index of nearly 130 producers has jumped since tumbling to the lowest on record last year, touching a near four-year high in February, as investors ascribe a greater value to the companies' assets. In doing so, we have laid the foundations for the Group to substantially grow the base value of its operations. Elliott is seeking to oust Arconic Chief Executive Officer Klaus Kleinfeld and replace four directors.

It also suggested changes to BHP's corporate structure. Liberum Capital's target price per share indicates a potential downside of -39.41% from the company's last stock close.

In a note to clients, Shore Capital analyst Yuen low said: "We find ourselves coming down on BHP's side of the argument".

In addition, Elliott's proposal includes BHP Billiton buying back shares according to a formulaic approach without regard for the cyclical nature of the resources industry or the returns available from other uses of cash. The company said in February that oil and copper are better placed in longer-term than materials including iron ore and coal. The stock was very attractive in 2016, when it rose more than 40%. The Iron Ore segment is engaged in mining of iron ore.


  • Playing political poker with bridge tolls

    Playing political poker with bridge tolls

    President Donald Trump and Britain's decision to leave the European Union as he dismissed the NDP and the Liberals. As for the Liberal platform, Weaver said it's "so void of ideas, it's staggering".

    Vladimir Putin meets French far-right candidate Marine Le Pen in Moscow

    Le Pen, leader of the National Front party, said she and Putin discussed ways to fight "fundamentalism". On Friday, Marine Le Pen visited Moscow and met with Russian President Vladimir Putin in the Kremlin.

    Arab leaders ready to work with Trump on Mideast peace deal

    Five former Lebanese presidents and prime ministers aroused the ire of Hezbollah and its supporters this week for penning a. Trump has since invited Abbas to the White House, a meeting Abbas said he expects to take place in late April or early May.
  • Ailing Josh Donaldson not starting in Blue Jays' home opener

    Ailing Josh Donaldson not starting in Blue Jays' home opener

    Now in addition to the quiet bats, there is some concern with Donaldson who pulled up with a sore calf on Sunday in Tampa. Marco Estrada took his first loss of the season giving up 5 earned runs on 7 hits while striking out 5 over 5 innings.
    Prince George and Princess Charlotte join aunt Pippa Middleton's bridal party

    Prince George and Princess Charlotte join aunt Pippa Middleton's bridal party

    But royal author Judy Wade says it's quite unlikely that Kate Middleton will have a prominent role in Pippa's wedding. Pippa reportedly has a strict " no ring, no bring " policy, which means guests can only bring spouses as a plus one.

    North Korea says Syria airstrikes prove its nukes justified

    The comments were made by a Foreign Ministry official and carried Sunday by North Korea's state-run Korean Central News Agency. Despite the criticism from Moscow, U.S.
  • Hungary should talk with Soros-founded school

    Hungary should talk with Soros-founded school

    Protesters filling Kossuth Square outside Parliament said they want President Janos Ader to veto the legislation. The protesters said they wanted to convince Ader to reject the bill and refer it for constitutional review.

    North Korea fires ballistic missile into its eastern waters

    A U.S. statement said initial assessments indicate the type of missile was a KN-15 medium-range ballistic missile. "We have no further comment", Secretary of State Rex Tillerson said in a statement.
    United States  disappointed by Russia's reaction to its airstrike on Syrian airbase - Tillerson

    United States disappointed by Russia's reaction to its airstrike on Syrian airbase - Tillerson

    We don't even know who's bombing us, we are just being bombed. "This regime should be ousted from leading Syria at once". Embassy in the Turkish capital of Ankara to protest Friday's U.S. missile strike on a Syrian air base.
  • Microsoft patches serious Word bug targeted by scammers

    Microsoft patches serious Word bug targeted by scammers

    Microsoft confirmed it is planning to fix the issue in a patch set to be released with its scheduled monthly update on Tuesday. Both McAfee and FireEye noted that the exploit can bypass most memory-based mitigations included in Windows.
    Apple is developing in-house power management chips, German analyst reports

    Apple is developing in-house power management chips, German analyst reports

    It would mean Apple calling time on its existing arrangement with Dialog Semiconductor, which makes chips for existing iPhones. Apple hired several Imagination employees before news broke of the company's plans to sever ties with the firm.
    New York Set to Make State College Tuition Free for Middle Class

    New York Set to Make State College Tuition Free for Middle Class

    The scholarship is structured to fill in the gap after accounting for other federal and state grants. That income cap will be raised to $110,000 by the end of next year and $125,000 by 2019.


Latest news

Louis sues NFL, teams over Rams relocation to LA
Louis are seeking damages and the restitution of profits that they lost stemming from the Rams' move to Los Angeles. According to the plaintiffs, the lawsuit has merit because the Rams didn't meet the NFL's standard for relocation.

What is Good Friday? Why is it called Good Friday?
If you want to look up this reference for yourself, you can find it in the Bible , the Gospel of John, Chapter 3 and verse 16. Churches usually do well in ministering to grieving families at the time of a death, but that ministry is not always lasting.

Federal government to partially lift hiring freeze
Implementation of some agreed upon reforms may begin following the July meetings, while reforms continue to be assessed. White House officials are expected to finalize those reorganization plans by September.

New 'Thor: Ragnarok' Trailer - It's Thor vs. Hulk!
However, Bank's "stolen style" joke doesn't really make any sense because Hela's always had her dark green look in the comics. She then blows him to oblivion, showing the extent of her power as she overthrows Asgard with her sheer prowess.

Trump tells newspaper Obama aide might have broken the law
Senior intelligence agency officials then decide whether that information can be provided without violating the legal guidelines . In a New York Times interview published Wednesday afternoon, Trump again accused someone of a crime, citing zero evidence.

ARMS and Splatoon 2 Nintendo Direct on Wednesday 12th
The arena-based fighting game utilizes motion controls, where players choose between different classes for unique attacks. The amount of these rewards hasn't been revealed, nor has Nintendo revealed the platform at the center of these bounties.

USA, Mexico & Canada Announce Joint Bid for 2026 World Cup
Soccer president explained the rationale behind having Canada and Mexico join the Americans' bid for the 2026 World Cup . While the bid is being branded as being from all three countries, it clearly favours the United States.

Sunderland stay rooted to the bottom after United defeat
Sunderland will consider an appeal against Larsson's dismissal with Moyes convinced his midfielder was harshly treated. Zlatan Ibrahimovic put United 1-0 up on 30 minutes before Seb Larsson was sent off for a high tackle on Ander Herrera.

Glum Wenger counts cost of Arsenal's latest defeat
The last time the north London outfit lost four league away matches in a row came in 1995 under the management of Stewart Houston. I've managed over a thousand games for Arsenal Football Club and we are not used to it, so of course it's a big worry".

'Mowgli girl' found living with monkeys in Indian jungle
Ajay Deep Singh, district magistrate of Bahraich, had visited the hospital three days ago and dubbed her "Van Durga". A Hindustan Times report said the little girl, 10, was shifted to a shelter home for the disabled in Lucknow.

Salute to Chuck Berry opens Rock Hall ceremony
ELO - who kicked off the show with Berry's "Roll Over Beethoven" - and progressive British rockers Yes were also inducted Friday. Perry, estranged from the band for many years, did embrace guitarist and co-founder Neal Schon onstage.

Flynn made $1.3 million for lobbying, speeches, other work
A National Security Council aide is reportedly behind a White House leak that is roiling Congress and the Trump administration. Flynn reported assets worth between $1.2 million and $2.4 million during the a year ago .

ADB sees growth moderating to 6.4%
Japan, the world's third-largest economy, "remains dependent on its ability to maintain export growth to continue its expansion", the ADB said.

A Trump national security adviser tapped as Singapore envoy
That authority led to last week's removal of senior adviser Steve Bannon from the council's principals committee. Powell joined the White House to work with Trump daughter Ivanka on women's empowerment issues.

Ibrahimovic inspiration keeps Man United in top-four race
Asked about their situation, he said: "It's still as hard - probably more hard because there's a game less". It is the way it works and I am from the old generation, which I think was more like that.

Other news