Elliott fans BHP fire
have revealed extremely broad and deep-rooted support for proactive steps to be taken by management to achieve an optimal value outcome,” it said in a letter to BHP’s board, released publicly yesterday.
The logical next step would be an in-depth, open and timely independent strategic review of the business, Elliott said. The statement is part of a public campaign launched by Elliott in April, urging the miner to spin off its US petroleum business for listing in New York and to return more cash to shareholders through buybacks.
It had previously also asked BHP’s board to improve returns by merging the UK and Australian entities into a single Australian-headquartered and London-listed company.
Yesterday, Elliott seemingly backed down on the restructure, saying it was open to a unified company that would retain its full share market listing in Australia and London.
It said it had listened carefully to feedback on the collapse of the dual-listed structure, including the regulatory sensitivities, and believed the solution lies in a unified business remaining Australian-headquartered and a fully Australian tax resident, with a full ASX listing and a full LSE listing.
“We understood from the start that unification requires BHP to cut through certain complexity – and that Australians in particular feel passionate about BHP remaining rooted in Australia,” Elliott’s letter said.
Earlier this month, Federal Treasurer Scott Morrison threatened court action to prevent Elliott’s original plan for BHP to have a primary London listing and its shares still traded on the ASX through CHESS Depository Interests. Mr Morrison said it is unthinkable that any Australian government could allow BHP to head offshore.
Elliott also said it had seen a significant groundswell of dissatisfaction among BHP shareholders because of the company’s chronic underperformance, and accused its board of not being open to suggestions and misleading in its response to the original proposals.
“We reject both claims,” BHP said in a statement, adding it will review Elliott’s revised proposal in full.”