Singer's Elliott Boosts Activist Stake In BHP Billiton To 5%

Aug 15 2017 | 8:24pm ET

Paul Singer’s activist hedge fund Elliott Management has increased its stake in global commodities giant BHP Billiton Plc and reiterated in a statement its confidence that the company’s management would continue taking steps that increase shareholder value. 

Elliott first disclosed an activist interest in the company back in April, disclosing a 4.1% stake at the time and embarking on a blistering campaign aimed at forcing the firm to abandon its dual company structure, spin off assets and return cash to shareholders.

Elliott’s statement listed a number of “constructive steps” the hedge fund believes will enhance value at BHP, including:

  • A full exit from U.S. shale activities.
  • An independent review of the company’s petroleum business and its place withiin BHP’s portfolio of assets. 
  • Instituting new capital allocation procedures, which Elliott says will ensure the significant free cash flow BHP generates results in enhanced returns to shareholders over time via additional dividend income and through the efficient use of share buybacks.
  • Unification of BHP’s “value-restrictive and obsolete” dual-listed company structure around a new single Australian listing. 

Elliott is betting on chairman-elect Ken MacKenzie to institute its ideas, saying in the statement that “BHP’s shareholders have made it clear that constructive steps for substantial and meaningful change are needed at BHP” and that MacKenzie’s election is “an opportunity for action.”

Founded in 1977 by Singer, Elliott Management operates two hedge funds, Elliott Associates and Elliott International. Among the world’s most prolific and closely-followed investors, combined assets under management at Elliott total more than $33 billion on behalf of pension plans, sovereign wealth funds, endowments, charitable foundations, funds-of-funds, individuals and families, and employees of the firm.

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