WHAT OTHERS THINK

“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 July 27, 2017