BHP Billiton CEO to Meet with Activist Shareholder Elliott

MELBOURNE, Australia--BHP Billiton Ltd.'s (BHP.AU) Chief Executive Andrew Mackenzie will meet Wednesday with representatives from Elliott Management Corp., the activist investor pushing for the resources company to shed at least some of its oil and gas assets and boost shareholder returns.

The talks are set to take place on the sidelines of a mining and metals conference in Barcelona, a day after Mr. Mackenzie told an audience there the company was confident a strategy of cutting costs and unlocking latent production capacity could boost the value of the company by up to 50%.

Hours before the presentation, the New York hedge fund revised its attack following BHP's rejection last month of its earlier call for the company to spin off its U.S. petroleum business, collapse its dual-listed structure around its London shares and adopt a consistent plan of buying back shares.

Mr. Mackenzie didn't address Elliott's latest salvo in his speech, and while the company said it would review the plans and respond it rejected Elliott's suggestions it was misleading in its earlier response and that it wasn't open to suggestions.

Elliott has accused BHP of being a chronic underperformer. It first approached the mining and energy company last year, and has over the last month been seeking support among other shareholders in Australia and internationally for its proposals.

On Tuesday, it said that there was broad support among investors for a restructuring of BHP's petroleum business and general agreement that there should be a renewed focus on capital returns.

The investment firm managed by Paul Singer has a reputation for slowly grinding away at companies to push through changes.

In a shift, its plans now call for BHP to remain incorporated in Australia and to retain full Sydney and London listings, as well as Australian headquarters and a full Australian tax residence. That appears to address concerns in Australia after Treasurer Scott Morrison said any move to the U.K. would contrary to the country's interest and would breach orders put in place by the government more than 15 years ago with the merger of Australia's BHP Ltd. and London-listed Billiton PLC that required a listing on the Australian Securities Exchange.

Elliott instead said BHP's management should work harder to find a solution to the legacy structure. It also conceded there were other options for the oil and gas assets and called on the company to launch an in-depth, independent review of its entire petroleum division.

In his speech, Mr. Mackenzie said the petroleum business was core to BHP's growth plans but he acknowledged the company had over-paid and invested to aggressively to build a position in the U.S. onshore shale sector. The company has pivoted back toward conventional oil and gas production and while the shale business now expected competitive returns, BHP was open to discussing a sale of the assets, he said.

Write to Robb M. Stewart at

(END) Dow Jones Newswires

May 17, 2017 03:09 ET (07:09 GMT)