MELBOURNE, Australia--Elliott Management Corp. Wednesday said it has increased its holding in BHP Billiton Ltd. (BHP.AU) and signalled it backs the incoming chairman to act on the sweeping changes it has been seeking.
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Elliott, which has for months campaigned for the resources giant to exit its U.S. onshore oil-and-gas assets and to collapse its dual-listed structure, said it now holds 5% of BHP's London shares.
The increased stake leaves it well placed to monitor BHP's progress and to hold it accountable for delivering results, it said.
When Elliott went public with its proposals for BHP in April, it said it controlled about 4.1% stake in the London shares, held through swaps. That was lifted close to 4.5% about a month ago, and a person close to the matter said the swaps were terminated, which allowed Elliott to buy the shares and lift its stake. It also has a 0.5% economic interest in BHP's Sydney-listed stock, according to its website.
Elliott has declined to state whether it will seek to nominate a director to BHP's board. It has until a day after BHP is due to release its annual results on Aug. 22 to put forward a candidate in time for the next annual shareholders' meeting, although the person said that with a 5% stake it could call an extraordinary general meeting at any time.
A spokesman for BHP declined to comment.
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With its latest statement, Elliott's tone appeared to have softened somewhat. It said, BHP looked to have taken steps toward a more value-generative way of doing business and its recent comments gave Elliott confidence Chairman-elect Ken MacKenzie would heed shareholders' calls to take steps to enhance value for the company and its owners.
Elliott, which is known for its strong-arm tactics, called for BHP to fully exit its U.S. shale operations and reiterated it wanted an independent review of the global petroleum business. It also reiterated a call for BHP to unify its dual structure, which it previously said should be done around the Sydney listing, and for the company to take a new approach to capital allocation.
"With new leadership, shareholders fully expect the true value of their company to be unlocked, something which we are confident BHP's chairman-elect has firmly in mind as he takes the reins," Elliott said.
Speaking at industry conference in Barcelona in May, BHP Chief Executive Andrew Mackenzie said the company was open to options for the U.S. shale operations and admitted the company had mistimed the shale acquisitions at the peak of the gas-boom and had more recently pivoted its focus toward conventional assets. In July, BHP said it was stepping up activity in the shale fields, which some analysts said could be in order to better position them for sale when oil-and-gas prices are stronger.
Mr. MacKenzie was selected in mid-June to succeed Jac Nasser when he retires next month after seven years as chairman. That would elevate Mr. MacKenzie, a packaging-industry veteran, one year after he joined BHP's board as a nonexecutive director.
The company has said it has regularly reviewed its dual structure and its portfolio of assets, but has found unifying the structure would ultimately cost more money than it would save. Executives have repeatedly said the petroleum division was core to the company, sitting alongside its iron-ore, copper and other mining operations.
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(END) Dow Jones Newswires
August 15, 2017 22:49 ET (02:49 GMT)