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BIL 201704100020A
BHP Billiton Notes Elliott Proposal
BHP Billiton Plc
Registration number 3196209
Registered in England and Wales
Share code: BIL
ISIN: GB0000566504
NEWS RELEASE
Release Time IMMEDIATE
Date 10 April 2017
Release Number 13/17
BHP BILLITON NOTES ELLIOTT PROPOSAL
BHP Billiton notes the publication of a letter from Elliott Associates, L.P. and Elliott
International, L.P. (Elliott), which outlines a proposal for changes to the Group’s Dual
Listed Company (DLC) structure, asset portfolio and capital management.
BHP Billiton regularly reviews opportunities to create value. Those reviews have
included the key elements of Elliott’s proposal. We have had dialogue with Elliott over
many months, consistent with our commitment to shareholder engagement.
After reviewing the elements of Elliott’s proposal, we have concluded that the costs
and associated risks of Elliott’s proposal would significantly outweigh any potential
benefits.
Elliott proposes that the Group replace the DLC with a single United Kingdom
domiciled company, with a primary listing in London and with Chess Depository
Instruments quoted in Australia on the Australian Securities Exchange. Although we
keep the DLC structure under review, we have not yet identified sufficient benefits to
outweigh the significant costs which would be incurred in unifying the DLC.
Unification of the DLC in the manner proposed by Elliott would require approval by
the Australian Foreign Investment Review Board.
Elliott’s proposal includes BHP Billiton demerging its US Petroleum assets into an
entity to be listed on the New York Stock Exchange. Elliott’s demerger proposal is
based on a view that investors would ascribe a higher value for these assets in a
separately listed entity.
There is no obvious discount in BHP Billiton’s trading multiples relative to the
weighted average of relevant mining and oil and gas peers. BHP Billiton has
disclosed the information the market needs to fully value the Petroleum business.
BHP Billiton’s approach is to optimise the long term value of the Petroleum business
through operating excellence.
Elliott’s proposal also includes BHP Billiton buying back shares according to a
formulaic approach without regard for the cyclical nature of the resources industry or
the returns available from other uses of cash. Consistent with its capital allocation
framework, BHP Billiton assesses the value buybacks could create compared to the
competing objectives of strengthening the balance sheet, investing in growth or
making additional dividend payments.
Since the formation of the DLC in 2001, we have returned to shareholders
approximately US$23 billion in buybacks of BHP Billiton Limited and BHP Billiton Plc
shares, and approximately US$56 billion in cash dividends.
Since 2013, BHP Billiton has reduced the number of assets in the portfolio by more
than one third, through the demerger of South32 and the sale of over US$7 billion of
assets. We have reduced unit costs by more than 40 per cent. Under BHP Billiton’s
updated dividend policy, shareholders now receive a minimum 50 per cent of
underlying earnings as a dividend each period. We have introduced a rigorous capital
allocation framework, which balances value creation, cash returns to shareholders
and through the cycle balance sheet strength in a transparent and consistent
manner.
In doing so, we have laid the foundations for the Group to substantially grow the base
value of its operations. Elliott’s proposal would put this at risk.
The Board of BHP Billiton will consider further its detailed response to the proposal
and will make a further announcement in due course.
Further information on BHP Billiton can be found at: bhpbilliton.com
Sponsor: UBS South Africa (Pty) Limited
Media Relations Investor Relations
Australia and Asia Australia and Asia
Gabrielle Notley Tara Dines
Tel: + 61 3 9609 3830 Mobile: +61 411 071 715 Tel: +61 3 9609 2222 Mobile: +61 499 249 005
Email: Gabrielle.Notley@bhpbiliton.com Email: Tara.Dines@bhpbilliton.com
Paul Hitchins Andrew Gunn
Tel: +61 3 9609 2592 Mobile: +61 419 315 001 Tel: +61 3 9609 3575 Mobile: +61 402 087 354
Email: Paul.Hitchins@bhpbilliton.com Email: Andrew.Gunn@bhpbilliton.com
Fiona Hadley United Kingdom and South Africa
Tel: +61 3 9609 2211 Mobile: +61 427 777 908
Email: Fiona.Hadley@bhpbilliton.com Rob Clifford
Tel: +44 20 7802 4131 Mobile: +44 7788 308 844
Amanda Saunders Email: Rob.Clifford@bhpbilliton.com
Tel: +61 3 9609 3985 Mobile: +61 417 487 973
Email: Amanda.Saunders@bhpbilliton.com Elisa Morniroli
Tel: +44 20 7802 7611 Mobile: +44 7825 926 646
United Kingdom and South Africa Email: Elisa.Morniroli@bhpbilliton.com
Neil Burrows Americas
Tel: +44 207 802 7484 Mobile: +44 7786 661 683
Email: Neil.Burrows@bhpbilliton.com James Wear
Tel: +1 713 993 3737 Mobile: +1 347 882 3011
North America Email: James.Wear@bhpbilliton.com
Bronwyn Wilkinson
Mobile: +1 604 340 8753
Email: Bronwyn.Wilkinson@bhpbilliton.com
BHP Billiton Limited ABN 49 004 028 077 BHP Billiton Plc Registration number 3196209
LEI WZE1WSENV6JSZFK0JC28 LEI 549300C116EOWV835768
Registered in Australia Registered in England and Wales
Registered Office: Level 18, 171 Collins Street Registered Office: Neathouse Place
Melbourne Victoria 3000 Australia London SW1V 1LH United Kingdom
Tel +61 1300 55 4757 Fax +61 3 9609 3015 Tel +44 20 7802 4000 Fax +44 20 7802 4111
Members of the BHP Billiton Group which is
headquartered in Australia
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