Fed threat on BHP UK move
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.”
Haul truck at BHP Billiton's Jimblebar mine.