BHP Billiton Share Discussion Threads

[loganair] 28/4/2017 08:45

After reviewing Elliott’s plan, BHP Billiton’s board and management “concluded that the costs and associated disadvantages of each element of Elliott’s proposal would significantly outweigh the potential benefits,” the group said.

[anley] 26/4/2017 11:39

BHP Billiton looks at shale field sales in wake of Elliott agitation...............
and a number of US brokers back this idea.

On a share price uplift it will be difficult to predict what may happen but all the peices of Elliotts jig saw are in place where BLT are not........

Trench warfare is on......

[anley] 26/4/2017 10:25

I notice that Elliott is not going to give up and is doing the rounds to get support............so far so good.

Watch this space.........

[loganair] 26/4/2017 09:15

Mining giant BHP Billiton has put its US-based Fayetteville shale gas assets up for sale, amid pressure from key investors to maximise profits.

The Arkansas field "is currently under review and we are considering all options including divestment", said the world's largest miner in a nine-month operational review. The assets were valued at $919m (£717m) at the end of 2016, according to its annual accounts.

In a statement in the review BHP Billiton chief executive Andrew Mackenzie said: "Everything we do at BHP Billiton is designed to create value for all of our shareholders, today and for the long term. But we have more to do and we are not standing still."

Mackenzie added a simpler portfolio of assets "allows us to improve safety and operational performance more quickly".

The miner said the sale of the aluminum and other non-core operations over recent years has generated $7bn is sales and cut the number of assets in its portfolio by over a third.

As regards petroleum, BHP has long said it intends to focus on liquid products in the US, a more lucrative business than dry gas.

[the_equaliser] 23/4/2017 11:40

Held then sold out. Looking at entry but not sure on metal prices

[anley] 23/4/2017 09:55

All ELLIOTT has to do is get 10% of the votes under his belt and call an EGM to put some of his men on the board and eject some of the current board and then who knows what might happen.

Aberdeen Asset have indicated they will support so its not too difficult for Paul Singer to go this route as there will be others.

I am a buyer for the chase..................

[herbyrainer] 20/4/2017 19:53

Based on my tea leaves this morning..........

[anley] 20/4/2017 13:59

Based on what HERBYRainer...........Elliott doing its slow grind with the management or Iron Ore going back to a different level as well as continued cost cutting and a small increase in the dividend?

and that goes for SHUJJA1.............both of you are gambling and not serious investors......are you?

[herbyrainer] 20/4/2017 11:06

Good luck shujja1, my target is £14+ by the end of the year.

[shujja1] 19/4/2017 11:47

Me too in st 1203 should bounce

[herbyrainer] 19/4/2017 11:42

Taken a position here at £12.

[jswjsw] 12/4/2017 15:38

So exactly why are BHP management being so gormless about it?
There is no way they will extract such value with the 'current plan'.

For many years (1980s) Hanson said they would not split the company. When they finally did, they said how prescient certain investors had been to suggest it (years before!!)
It unlocked huge value for Hanson shareholders and created more focused, more profitable companies as a result.

What BHP management should do is something similar - 1984-style - and re-write history: a circular saying they have come up with this wonderful idea...

[anley] 11/4/2017 17:44

Just to bring you up to date with the potential break-up of BLT......it might take time (2/3 years) but Pual Singer will win in the end as he always does.......

Elliott Management says BHP Billiton was too quick to reject its proposal and should reconsider its suggestions for restructuring the company.

Elliott says it had considered earlier meetings with BHP's management to be "constructive" and that the company should broaden the discussion to include all shareholders.

Brenton Saunders, portfolio manager for BT Investment Management in Sydney, says he supports the idea of selling BHP's onshore U.S. oil assets, but that while the approach from Elliott would prompt management to reassess its strategy, the hedge fund was unlikely to be able to force its plan through.

[anley] 10/4/2017 12:23

LOGANAIR......just look at all the TOSH you posted on behalf of other people who really do not know what they are talking about...........personally I would not do that any more as it makes you look silly NOW the STORY is CHANGING.

Go back to my POST 12646 which was not really debated but now should be as Elliott have put BHP in play and its cash that is driving their issues over what should be sold etc etc.............OIL takes up too much "long" term capital where IO is cash.

I have been a big shareholder in SOUTH32 having made well over 100% on my capital along with GLEN and now I am left with BHP and will add on any price slippage.

I don't post too often but will do so if I see how we can all make a good return on our efforts.

[gertie2shoes] 10/4/2017 10:16

It will be interesting to see where the UK shares get 'priced' by the UK hedgies under this scenario. Any ideas?

[loganair] 10/4/2017 09:08

BHP Billiton directors have been urged by activist investor Elliott Management to cancel the mining giant's London listing in a unification with its Australian headquarters alongside a £22bn disposal of its US petroleum business.

On top of tweaks to its capital return policy, the hedge fund said these measures would together result in Plc shareholders enjoyed a 51% increase in the attributable value of their shares.

Elliott, which owns a stake of around 4.1% in the FTSE 100-listed group and will be known to UK investors for its activism in Meggitt and Alliance Trust, sent a letter to BHP's directors and set up a website outlining its three-point plan to "unlock value and improve capital returns to shareholders".

“Despite being a leading global resources company with a portfolio of best-in-class large-scale diversified mining assets, in recent years BHP as an investment has underperformed a portfolio of comparable mineral and petroleum companies,” the fund manager said.

Ending BHP's dual-listed company structure by creating a single Australian-headquartered and Australian tax resident listed company is a prime demand, as following the May 2015 spin-off of its base metals and coking coal assets into South32, Elliott estimated that the London-listed Plc part of the business generates only around 8.9% of group operating profits while its shares account for 39.7% of BHP's total.

The "long-term misalignment" of profits versus shareholder base in the dual-listed company structure "has led to a massive and continuing build-up of franking credits", which it puts at a total of $9.7bn, or around 10% of BHP's market capitalization.

A unification of the two listings would not only put BHP's Limited and PLC shareholders "on the same footing", but also allow BHP to access the value represented by the US$9.7bn franking credit balance, "significantly enhance" the scope and value of BHP share buybacks, and "help management to avoid making badly timed acquisitions paid for in cash".

The letter demanded demerging and separately listing the US petroleum business, which is valued "well in excess of the current analyst consensus" at around $22bn, as it "provides no meaningful diversification benefits to BHP", offers a "lack of synergies" with the group's mining assets and "its intrinsic value is being obscured".

And, with BHP expected to generate $31bn of excess cashflow in the next five years, assuming the current 50% payout ratio of net income, Elliott was unstinting in its directness.

"Unfortunately, BHP has previously used excess cash to make value-destructive acquisitions when it acquired certain Fayetteville assets and Petrohawk. Management should avoid making badly timed acquisitions for cash and instead return its substantial upcoming excess cashflow to shareholders by way of highly value-accretive post-unification 14% discounted off-market share buybacks."

The fund manager said its analysis showed that the plan would enable BHP’s management to provide shareholders with an increase in value of up to almost 49% on the Australia-listed shares and about 51% on the UK-listed shares.

[jswjsw] 10/4/2017 09:01

Correction - actually higher in OZ: 25.73 AUD

[jswjsw] 10/4/2017 08:59

Rise due to Elliott proposal that spin off US Petroleum & unlock UK/Oz synergies.
Ended at 1505p in Sydney!!

US $19.20

j

[loganair] 23/3/2017 10:55

The BHP Billiton Limited (ASX: BHP) share price has so far managed to rebound 1.6% today following yesterday’s sell-down. The BHP share price is now fetching $24.30, compared to a recent high of $27.95.

BHP Billiton has been one of the market’s top performing blue chip shares over the past 12 months, lifting around 38% during that time. Although it started 2017 on another high note however, the BHP share price has since taken a turn for the worse and is trading 3% lower since the year began.

The reason for yesterday’s decline appears to have been a sharp fall in the price of both iron ore and oil – both of which BHP produces. The iron ore price fell 4.3% on Tuesday and another 3% overnight to just under US$85 a tonne, according to The Metal Bulletin, while oil prices were trading 0.6% lower as well.

Although commodity prices are prone to fluctuations, the movements over the past two sessions are bound to make some investors in the sector anxious. After all, both iron ore and oil have skyrocketed in price since bottoming out in early 2016. But with particular regards to iron ore, there are some predictions that suggest a sharp decline is in store for the commodity before the end of 2017 which has the potential to drag heavily on the BHP share price, together with the share prices of rivals Fortescue Metals Group Limited (ASX: FMG) and Rio Tinto Limited (ASX: RIO).

For instance, The Australian Financial Review recently reported:

“However, for all that commodity’s price gains defied predictions in 2016 and early 2017, many analysts now believe new supply, high inventories, and insufficient demand are setting iron ore up for sharp losses in the second half of this year.”

Now, BHP is one of the lowest cost producers in the world, as are Rio Tinto and Fortescue. But falling iron ore prices would still have an impact on their margins and hence, their ability to generate stronger returns for shareholders.

Because of its diversification, its long operating history and its lower costs, BHP is justifiably one of the first miners investors should look at for exposure to the sector. But after its strong run, and the risk of a pullback in commodity prices this year, investors ought to approach with caution.

[grahamite2] 16/3/2017 08:36

I thought of dumping this at 1600 but I knew it would come back.

Of course, if I'd known just how low it would go I'd have sold and bought back, but my crystal ball's been out of commission for a long time.

[loganair] 13/3/2017 10:38

By Bilaal Mohamed:

To say the last few years have been challenging for global mining giant BHP Billiton would be a gross understatement. The world’s biggest mining company has seen both its revenues and earnings in a steep decline since 2011 as the slowdown in China has led to a significant fall in commodity prices.

Enormous loss:

Last year the Anglo-Australian mining giant posted enormous losses of $6.4bn, the highest in the company’s history, as the global slump in commodity prices and the Samarco mine disaster in Brazil took their toll. As a result, the company slashed its final dividend payout to 14¢ per share, a massive 77% cut from the 62¢ per share it declared the previous year. This left the full-year payout at 30¢ per share, some 76% lower than fiscal 2015.

However, last month’s interim results made for much better reading. Attributable profit came in at $3.2bn for the first six months of the year, compared to a loss of $5.7bn for the same period in 2015/16. The turnaround in fortunes was attributed to a recovery in commodity prices and stronger demand from China. There have also been major efficiency gains, with a further $1.8bn worth of savings expected through to the end of 2017.

Getting into shape:

In recent years the diversified mining giant has been forced to cut back on some of its capital investment programmes, sell assets and strengthen its balance sheet. Many believe that the worst may be over for commodities, but come what may, BHP is certainly in better shape to tackle whatever the future may hold for commodities prices.

From an investment perspective, BHP is certainly a lot more attractive than it has been for a long time. Despite a strong rally since the start of 2016, at around £12.45 the share price is still a long way below its 2011 peak of £26.31. The valuation isn’t too demanding either, with a forecast P/E of 11.7 for the current year to the end of June.

[loganair] 09/3/2017 09:13

Because the shares have gone ex-dividend.

The rest of the decline can be attributed to a broad sell-off in the energy and materials sectors. Both sectors are down around 2% today thanks partly to a slump in oil and iron ore prices.

[badg] 09/3/2017 09:01

What's going on today? Why the 4.5% drop?