Elliott Raises its Stake in BHP Billiton -- Update
August 15 2017 - 11:04PM
Dow Jones News
By Robb M. Stewart
MELBOURNE, Australia--Elliott Management Corp. Wednesday said it
has increased its holding in BHP Billiton Ltd. (BHP.AU) and
signalled it backs the incoming chairman to act on the sweeping
changes it has been seeking.
Elliott, which has for months campaigned for the resources giant
to exit its U.S. onshore oil-and-gas assets and to collapse its
dual-listed structure, said it now holds 5% of BHP's London
shares.
The increased stake leaves it well placed to monitor BHP's
progress and to hold it accountable for delivering results, it
said.
When Elliott went public with its proposals for BHP in April, it
said it controlled about 4.1% stake in the London shares, held
through swaps. That was lifted close to 4.5% about a month ago, and
a person close to the matter said the swaps were terminated, which
allowed Elliott to buy the shares and lift its stake. It also has a
0.5% economic interest in BHP's Sydney-listed stock, according to
its website.
Elliott has declined to state whether it will seek to nominate a
director to BHP's board. It has until a day after BHP is due to
release its annual results on Aug. 22 to put forward a candidate in
time for the next annual shareholders' meeting, although the person
said that with a 5% stake it could call an extraordinary general
meeting at any time.
A spokesman for BHP declined to comment.
With its latest statement, Elliott's tone appeared to have
softened somewhat. It said, BHP looked to have taken steps toward a
more value-generative way of doing business and its recent comments
gave Elliott confidence Chairman-elect Ken MacKenzie would heed
shareholders' calls to take steps to enhance value for the company
and its owners.
Elliott, which is known for its strong-arm tactics, called for
BHP to fully exit its U.S. shale operations and reiterated it
wanted an independent review of the global petroleum business. It
also reiterated a call for BHP to unify its dual structure, which
it previously said should be done around the Sydney listing, and
for the company to take a new approach to capital allocation.
"With new leadership, shareholders fully expect the true value
of their company to be unlocked, something which we are confident
BHP's chairman-elect has firmly in mind as he takes the reins,"
Elliott said.
Speaking at industry conference in Barcelona in May, BHP Chief
Executive Andrew Mackenzie said the company was open to options for
the U.S. shale operations and admitted the company had mistimed the
shale acquisitions at the peak of the gas-boom and had more
recently pivoted its focus toward conventional assets. In July, BHP
said it was stepping up activity in the shale fields, which some
analysts said could be in order to better position them for sale
when oil-and-gas prices are stronger.
Mr. MacKenzie was selected in mid-June to succeed Jac Nasser
when he retires next month after seven years as chairman. That
would elevate Mr. MacKenzie, a packaging-industry veteran, one year
after he joined BHP's board as a nonexecutive director.
The company has said it has regularly reviewed its dual
structure and its portfolio of assets, but has found unifying the
structure would ultimately cost more money than it would save.
Executives have repeatedly said the petroleum division was core to
the company, sitting alongside its iron-ore, copper and other
mining operations.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
August 15, 2017 22:49 ET (02:49 GMT)
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