Activist Elliott targets BHP Billiton retail shareholders in new campaign
Activist shareholder Elliott Management has stepped up its campaign aimed at BHP’s retail shareholders.
Activist shareholder Elliott Management has stepped up its campaign aimed at BHP’s retail shareholders, in a bid to make further change and maximise value at the company.
Playing on BHP’s new marketing slogan “Think Big”, the New York-based Elliott Management appeals to shareholders to “Think Smart” about their investment in the world’s largest miner.
With a relaunch of a website targeting BHP institutional shareholders, a new campaign begun in the past 24 hours is attempting to reach out to retail investors who make up about 30 per cent of BHP’s 600,000 shareholders.
Along with the new website — fixingbhp.com — a digital campaign will target Australian retail shareholders, but will not expand into print or television advertising.
The new website claims that decisions by BHP’s current management, including outgoing chairman Jac Nasser, have destroyed $US40 billion ($51bn) worth of value in the company.
“BHP’s management decide to ‘Think Big’ instead of thinking about shareholders — and destroyed billions in shareholder value in the process,” the website claims.
“Had these failures been avoided, BHP could have been worth at least $US40bn more today.”
BHP declined to comment. Elliott also declined to comment on the new website.
Elliott has about $US31bn under management worldwide, and has about $US1.4bn in BHP shares held in the London Stock Exchange.
The campaign appeals directly to retail investors ahead of the BHP shareholders meeting in November, asking shareholders to sign a petition supporting the changes.
It is understood that Elliott is largely satisfied with the impact its agitation has had so far in raising concerns about the value BHP’s current management was extracting from its current assets and structure.
This includes having incoming chairman Ken MacKenzie installed in the role. The Australian understands he was Elliott’s preferred candidate for the job but was still not confirmed in the role as little as two weeks out from the announcement.
The campaign focuses on abolishing BHP’s dual listing to stop the destruction of franking credits, exit shale, review petroleum assets and reform the board.
It also asks for improved dividend and share buyback policies to deliver more to shareholders.
“A unified BHP with smart dividend and buyback policies could deliver twice as much return over five years on a $10,000 investment in BHP — effectively doubling Australian shareholders’ yield,” the presentation claims.
Elliott has claimed the plan would add $US5bn in value to BHP while only costing $US200 million — despite claims by BHP the reform would cost $US1.2bn.
Elliott has been publicly orchestrating plans for BHP reform since April, but it is understood its approaches to BHP go as far back as October last year.
The April 10 presentation included the option to abolish the dual listing in favour of a London-listed entity with a deposit receipt on the ASX — a plan publicly opposed by Treasurer Scott Morrison.
Since then Elliott has modified its proposal that would see an abolition of the dual-listing with an ASX listing and Australia-based company for taxation purposes.
Elliott has also been highly critical of BHP’s offshore tax hubs, based in Singapore, which they claim dilute value in the company and risk further Australian government crackdowns, offsetting any past benefit.
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