Activist shareholder Elliott Management once again renewed a push for a simpler structure at BHP Billiton Group after commissioning a study that argues dropping the dual-listing structure could add over US$22 billion in shareholder value, Bloomberg News reported Feb. 5.
A single Australian-headquartered entity would allow greater flexibility to use stock in any acquisitions, make future spinoffs easier, reduce costs and bolster transparency, according to the FTI Consulting study.
The report projected a US$14.1 billion jump in the company's market valuation and US$8.7 billion via the release of Australian tax credits through dividends and buybacks.
This comes as Elliott, second largest shareholder of the miner's London-listed stock, raised its stake in BHP to 5.45% from 4.65%.
In a letter to BHP Chairman Ken MacKenzie, the shareholder urged the board to publicly commit to a review by the time the company announces its half-year earnings on Feb. 20.
The report suggested that the move to a unified company, with a primary listing in Australia and additional listings elsewhere, would cost US$391 million. However, BHP CEO Andrew Mackenzie has said earlier that the revamping of the listing structure would likely cost at least US$1.3 billion and outweighs the potential benefits.
Elliott noted that there is added urgency for a review, as a simpler structure could boost the value of new capital management programs.
The New York-based fund decided to commission the FTI report following conversations with a number of investors, who also want an independent review of the issue, it said in the letter.
In 2017, various shareholders called for an overhaul of the company's board as well as for a spin off of its onshore assets. Caving in to the pressure, the miner later announced its exit from its U.S. shale business, while it changed course on the development of the Jansen potash project in Saskatchewan, an investment criticized by Elliott.
BHP declined to comment on Elliott's latest call for a change at the company, the newswire added.
