BHP Billiton CEO meets with shareholder Elliott

BHP Billiton CEO meets with shareholder Elliott

BHP Billiton CEO meets with shareholder Elliott

Activist Investor Elliott Management is pushing for changes at mining company BHP.

Chief Executive Officer Andrew Mackenzie plans to meet with representatives of Elliott Management Corp. this week as the hedge fund continues to push for the sale of the company's USA petroleum business, according to two people familiar with the situation.

BHP had dismissed Elliott's previous proposal, saying the plan had major flaws and would not benefit shareholders.

The changes also appear to address opposition by the Australian government to any attempt to have BHP trade around a main listing in London, which Treasurer Scott Morrison said would be considered a criminal offense.

"We will review the materials in full and formally respond as appropriate", BHP said in a statement, adding that chief executive Andrew Mackenzie will update shareholders on its plans to significantly grow long term shareholder value.

Earlier on Tuesday, billionaire Paul Singer's Elliott sent a second letter to the board of BHP, this time demanding an independent review of the company's oil division, which Deutsche Bank AG values at about $22.5 billion. The company has pivoted back toward conventional oil-and-gas production and while the shale business now expected competitive returns, BHP was open to discussing a sale of the assets, he said.

BHP's new logo
BHP's new logo. Supplied

BHP spent ~$20B buying USA shale assets earlier in the decade and has since written off more than half the value of the acquisitions, and Mackenzie admits "the acquisitions that took us into this business were poorly timed, that we paid too high a price".

Elliott instead said BHP's management should work harder to find a solution to the legacy structure.

The investor today published documents claiming to show BHP has "substantially underperformed" rival Rio Tinto, the FTSE 100, S&P 500 and ASX 200 in recent years.

Elliott, which manages almost $33 billion, is known as an aggressive activist investor that doesn't shy away from targeting big companies in places where others have been hesitant to wade into local politics.

The funds manager has called for an open and independent review of BHP's petroleum business.

BHP Billiton has unveiled plans to rebrand itself by dropping the Billiton from its name, a shift that highlights the mining group's Australian roots. It denied the effort was a reaction to Elliott and said it had been developed over about 18 months in an effort to rebuild community trust in the company.

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