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Komfie Manalo, Opalesque Asia: Activist hedge fund Elliott Management has gained the support of major BHP shareholders in its call for a change in leadership in the Australian mining giant.
In a statement, Elliott said that over the past few weeks, BHP's shareholders have made clear that substantial and meaningful change is needed over frustration in the company's underperformance.
The hedge fund stated, "Over the past two, five and 10 years, BHP has underperformed its closest peer Rio Tinto by 31%, 44% and 11% respectively. It added that during the same period, BHP has underperformed the ASX 200 Index by 21%, 78% and 39% respectively. "And even over the longer term, BHP has underperformed Rio Tinto by a staggering 148% and 628% over 20 and 30 years respectively."
BHP's weak shareholder returns would not exist in isolation. Current BHP management has used its owners' capital unwisely - destroying tens of billions of dollars in shareholder wealth on an ill-advised expansion into the U.S. onshore petroleum business. Billions more have been destroyed on share buybacks at inflated prices, Elliott added.
In a note to investors, Australian fund manager AMP Capital and one of BHP's largest shareholders, called on BHP to conduct an "independent assessment" of Elliott's proposal to unify BHP's legacy dual-listed company structure and to "prove the worth of its U.S. onshore business and why it is compatible in the BHP portfolio."
And AMP Capital is just the lates...................... To view our full article Click here
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