Fed threat on BHP UK move

Pilbara News - - News - Shane Wright and An­drew Til­lett

Scott Mor­ri­son has vowed to keep the Big Aus­tralian at home, warn­ing he will use dra­co­nian Fed­eral pow­ers to kill any plans to shift BHP Bil­li­ton out of the coun­try.

In an un­prece­dented step, the Trea­surer re­solved last week to tell an Amer­i­can-based hedge fund its bid to shift BHP to Lon­don had no chance of suc­cess.

El­liott Man­age­ment, led by long­time in­vestor Paul Singer, is press­ing the com­pany to move its pri­mary share­mar­ket list­ing to Lon­don, with most an­a­lysts tip­ping the com­pany’s head­quar­ters would also shift to Bri­tain.

Mr Singer be­lieves re­mov­ing BHP from the ASX would de­liver bil­lions of dol­lars in ben­e­fits to in­vestors, but the com­pany has re­jected the idea amid con­cerns it could hurt lo­cal share­hold­ers and drive up costs.

Last month, BHP bosses said they had ex­am­ined the mer­its of uni­fi­ca­tion but found it would cost up to $US3 bil­lion while yield­ing just $US32 mil­lion in sav­ings.

Mr Mor­ri­son said it was be­yond com­pre­hen­sion the Fed­eral Gov­ern­ment could let BHP aban­don Aus­tralia.

“It is un­think­able that any Aus­tralian gov­ern­ment could al­low this orig­i­nal Big Aus­tralian to head off­shore,” he said.

“BHP Bil­li­ton’s Aus­tralian shares are held by hun­dreds of thou­sands of Aus­tralians di­rectly, and by mil­lions more through su­per­an­nu­a­tion funds and other in­vest­ments. “The com­pany plays an im­por­tant role in the Aus­tralian econ­omy.”

The Trea­surer’s in­ter­ven­tion pro­vides com­fort to thou­sands of BHP Bil­li­ton em­ploy­ees in Perth and re­gional WA.

Un­der the El­liott pro­posal, the lu­cra­tive Pil­bara iron ore op­er­a­tion and its Perth head­quar­ters would have been down­graded to a far-flung branch of­fice.

Mr Mor­ri­son said if the com­pany backed the El­liott Man­age­ment plan it would breach con­di­tions im­posed by then-trea­surer Peter Costello in 2001 that paved the way for the merger of BHP and Bil­li­ton.

He said the pro­posal may amount to a crim­i­nal of­fence un­der the For­eign Ac­qui­si­tions and Takeovers Act, adding that the com­pany’s di­rec­tors could be “held per­son­ally li­able”.

Ac­cord­ing to Mr Mor­ri­son, any move by a Lon­don Stock Ex­change­listed com­pany to buy the as­sets of BHP Bil­li­ton could be blocked by the Gov­ern­ment if it was deemed to be con­trary to the na­tional in­ter­est.

“If an ac­qui­si­tion pro­ceeds with­out my con­sent, I would be able to order a di­vest­ment of the as­sets ac­quired and take court ac­tion to en­force this order,” he said.

“The pro­po­nents of the ac­qui­si­tion may also be li­able to civil and crim­i­nal penal­ties.”

Peter Wil­liams

Haul truck at BHP Bil­li­ton's Jim­ble­bar mine.

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