New BHP boss heralds ‘timely’ shake-up

BHP BILLITON’S new chairperson is about to shake things up at the world’s largest mining company, according to asset management firm Sanford C Bernstein which, says Ken MacKenzie, will probably undertake a full-scale review of assets and strategy, and may de-merge the petroleum business. “Despite management’s reluctance to change at this stage, we believe BHP is about to experience a radical shift in strategy, driven by the arrival, effective September 1, of the new chairman,” analysts including Paul Gait said. MacKenzie used to run a packaging business, and his “detachment from the mining sector makes him, we believe, inevitably far more objective on the best direction BHP should take”.

The group has been the target of an activist investor campaign recently spearheaded by Elliott Management, which has rounded on management decisions that the fund claims have destroyed about $40 billion (R535bn) in value.

MacKenzie’s arrival to replace Jacques Nasser has been welcomed by Elliott, and Bernstein said it understands the investor and MacKenzie share views.

“We welcome the arrival of a chairman who is detached from industry pressures, can take a fresh look at the BHP portfolio and is unencumbered by the need to defend legacy investment decisions,” Gait said.