A week before BHP Billiton releases what is expected to be a big rise in annual profit and a higher dividend, US hedge fund Elliott Management says it has raised its stake in BHP Billiton to 5% – but the reason for the rise is unknown except that it generated some publicity yesterday.
New York-based Elliott launched its effort to get BHP to end its dual listing in Australia and London and sell its US oil and gas business and make other changes in April, at which point it held a 4.1% “economic interest” in BHP’s UK-listed shares, and later increased that to 4.5%.
Elliott said yesterday it now holds 5% of BHP’s UK-listed shares, and also holds a small ‘economic interest’ in BHP’s Australian shares. ‘Economic interest’ is taken to mean Elliott doesn’t actually own BHP shares, only the right to own them via something like options, contracts for difference or cash settled swaps.
"Recent statements by the company give us confidence that chairman-elect Ken MacKenzie will heed shareholders’ calls to take constructive steps to enhance value for BHP and its owners," Elliott said in a statement.
Those steps include exiting the US shale business "and an in-depth, open and truly independent review of the petroleum business’ place in BHP’s portfolio," Elliott said.
"We and other shareholders look forward to hearing more from management on this subject, following the growing analyst and shareholder consensus that BHP should exit US shale," the hedge fund said.
BHP, which up to now has rejected Elliott’s overhaul proposals as flawed, declined to comment on Elliott’s statement. BHP shares rose 0.2% to close at $25.67 after being down earlier in the day.
