Are BHP’s reforms really Elliott’s doing?
The fund manager didn’t get exactly what it wanted even on the demands the miner did accede to, writes Clyde Russell
Launceston — It’s tempting to think that BHP has caved into demands by activist investor Elliott Advisors by agreeing to sell its US onshore oil and gas business and by boosting the returns to shareholders. After all, divesting the US shale assets and lifting shareholder returns were two of Elliott’s three main points, made by the hedge fund in a letter to BHP directors in April. But it’s worth asking whether the decision to put the shale assets up for sale and increase dividends was motivated mainly by Elliott’s intervention, or whether they would have happened anyway. As far as dividends are concerned, it was always likely that BHP would follow fellow miners like Rio Tinto in returning substantially more cash to investors, especially in the light of the huge boost to free cash flow from sharply higher prices for iron ore and coal. BHP said in its annual results on Tuesday that it would triple its final dividend to $0.43 a share, slightly below the expectations of analysts. The wor...
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