WHAT OTHERS THINK

“The Elliott pitch, and the echo chamber of support that it generated from other disaffected owners, big and small, sure did help focus BHP management minds on the need for transparent urgency on just what the path being mapped out might be.” –Matthew Stevens, Australian Financial Review

“BHP bowed to pressure from investors last month, putting its lossmaking US shale oil business up for sale and delaying a move into potash.” –Neil Hume and Edward White, Financial Times

“[MacKenzie] said ‘board refreshment’ had been a topic of conversation with investors during a recent ‘listening tour’ and BHP was reviewing the metrics it uses to pick non-executive directors in light of ‘technological and other changes’.” –Neil Hume and Edward White, Financial Times

“There are still some saying the miner should have paid closer attention to the Elliott Management plan to restructure the whole business.” –Mining Journal

“This summer demonstrated the power activist shareholders can wield when FTSE 100 mining giant BHP Billiton cracked under pressure from Elliott, adopting plans to offload its US shale and gas business, which the investor had been calling for.” –Iain Withers, The Telegraph

“Some of BHP’s key decisions and statements over recent weeks, such as the increased dividend and decision to exit the controversial US onshore shale assets, seemed to show that BHP had been listening to what Elliott and others had been saying, and it had acted.” –Darren Gray, The Sydney Morning Herald

“Perhaps the push from Elliott, that shareholders need to be well rewarded, has reverberated around the wider mining industry, benefiting shareholders in a range of companies in the process.” –Darren Gray, The Sydney Morning Herald

“Elliott Associates finally convinced BHP to offload its troublesome US shale assets, something that local investors also had issues with but lacked clout to act on.” –Jemima Whyte, The Australian Financial Review

“While activist shareholder Elliott (run by Paul Singer) has not yet achieved what it really wants BHP to do (that is, unify the Australian and UK listed companies into a single vehicle), its campaign is certainly bearing fruit.” –Paul Rickard, Weekend Switzer

“Shareholders can have room for optimism. Elliott has a track record of moving the goalposts.” –Marcus Leroux, The Times

“In the past, investors demanding BHP Billiton to be more cost conscious would have been batted away. But thanks to the activist wing of US funds manager Elliott Associates the company has been forced to do something.” –Philip Baker, The Australian Financial Review

“BHP chief executive Andrew Mackenzie rightly deserves praise for putting BHP on track to a brighter future, but the 2017 results cannot hide the fact that Elliott Associates was dead right in calling out the company as a chronic underperformer.” –Tony Boyd, The Australian Financial Review

“Elliott served a very useful purpose by calling out the troublesome value destructive moves that other shareholders were not willing to discuss in public. The activist’s focus on the petroleum division was well and truly warranted.” –Tony Boyd, The Australian Financial Review

“Elliott has scored plenty of goals. The most important was BHP’s decision to sell the onshore oil/gas shale (unconventional) assets in the US.” –Elizabeth Knight, The Sydney Morning Herald

“Whether a direct response to Elliott or not, the board shuffle is another victory for the activist fund.” –Robb M. Stewart, The Wall Street Journal

“Perhaps Elliott’s most palpable hit has been its argument that BHP’s US petroleum business does not sit well inside a global mining company.” –Jon Yeomans, The Sunday Telegraph

“If Elliott is only 10% correct, the “think smart” plan represents considerable value to BHP shareholders and should be considered.” –Paul Rickard, Switzer Daily

“If you have been watching commercial television lately, you will probably have seen BHP’s commercials that are branded under the Think Big tag…While it might make the staff at the Melbourne Head Office feel a little better about working for BHP, for shareholders, it is just another example of a lazy $10m being frittered away.” –Paul Rickard, Switzer Daily

“For BHP shareholders, these are interesting times as they watch their company try to achieve two objectives; growth under management’s Think Big approach, or the promise of more cash rewards under Elliott’s Think Smart campaign.” –Tim Treadgold, Mining Journal

“BHP Billiton’s admission that its processes for calculating US shale impairments were deficient has attracted criticism, with one Australian shareholder saying the mea culpa was ‘manna from heaven’ for Elliott and other critics of the company.” –Peter Ker, AFR

“The sustained (but tempered) attacks from activist Elliott Management have seen BHP’s leadership publicly agree the oil and gas investments from 2011 were a bad move and the appointment of cleanskin MacKenzie as Jac Nasser’s replacement point to upcoming strategy changes.” –Mining Journal

“Some BHP owners are pleased a big investor like Elliott has come in and held management to account. Particularly in Australia, where the big beasts of mining are all-powerful in a relatively small investment market.” –Jim Armitage, Evening Standard

“Hedge fund manager Elliott Management’s ‘value unlock’ plan for BHP is starting to gain momentum, with a growing number of securities analysts and asset managers calling for the resources giant to make a more open and considered response to Elliott’s proposals.” –John Kavanagh, The Rub

“It’s hard to interpret his [Ken MacKenzie’s] statement on assuming the role as anything other than an olive branch to the activists who’ve been pestering management” –David Fickling, Bloomberg

“Elliott is rightly critical of BHP’s lacklustre market performance, in particular compared to archrival Rio Tinto” –Pete Sweeney, Reuters Breakingviews

“Elliott and the BHP Board may not be ready yet to sit down and smoke the peace pipe, but because BHP has such a lousy record and Elliott shows no signs of going away, BHP will inevitably cede major ground on this proposal.” –Paul Rickard, Switzer Daily

The logic of BHP staying in oil and gas is hard to see, as my colleague David Fickling has argued, and Elliott’s campaign has flushed out other supporters of a separation of all or part of the business. Elliott has been emboldened to call for a full-blown independent review of the unit’s future.” –Chris Hughes, Bloomberg

“If there are any potential buyers who accept his invitation to chat, Mackenzie would be wise to get an auction going” –Chris Hughes, Bloomberg

“BHP’s petroleum business looks well suited to a spinoff, and the more BHP resists, the more attractive its oil wells become. The Anglo-Australian miner should see Elliott’s campaign as a compliment.” –Andy Critchlow, Reuters Breakingviews

“Were a serious bid to emerge – and the assets could be attractive for an oil major like BP or Exxon – BHP chief Andrew Mackenzie would have a tough job rebuffing it out of hand.” –Andy Critchlow, Reuters Breakingviews

“[BHP] spent some $20bn buying US shale assets six years ago and has spent a similar sum developing them – yet the returns have thus far proved disappointing.” –Ian King, Sky News

“The suggestion to spin off some of the company’s U.S. petroleum assets seems quite sensible” –David Fickling, Bloomberg

“In BHP, Elliot has targeted a company that has lagged behind its mining peers during a commodity-price upswing. Elliott took particular aim at BHP’s oil-and-gas portfolio in the U.S., which has been hit with hefty write-downs in recent years and has dragged on the company’s profit amid a prolonged crude-price downturn.”—The Wall Street Journal, Rob Taylor

 “Elliott has a point: mining and oil don’t blend” –Financial Times

“Not many people outside the financial world actually understand how a dual-listed business works, but everyone can see that it is a cumbersome arrangement that carries high costs and adds nothing to the value of the business.” –Tim Treadgold, Mining Journal

“It might not take long for investors to see some value in Elliott’s unification (and spin-off) proposal.” –Tim Treadgold, Mining Journal

“Spinning out the oil business should release latent value not yet recognised in the current structure, or either of BHP’s share classes.” –FT Lex

“Splitting off BHP’s petroleum business could have some benefits. Oil peers such as EOG and Apache trade on multiples of between nine and 11 times forward EBITDA. BHP trades at about seven times, along with pure-play mining rival Rio Tinto, suggesting the benefits of owning a big oil business aren’t fully grasped by shareholders.” –Andy Critchlow, Reuters Breakingviews

“BHP’s two-headed structure is a historical accident born out of the merger of BHP and Billiton in 2001, not a strategic move.” –Andy Critchlow, Reuters Breakingviews

Updated September 20, 2017