Elliott struggles to understand ‘dismissive and premature’ BHP response

And the war of words continues…

Activist hedge fund Elliott Advisors on Tuesday criticised the management at BHP Billiton for the “dismissive and premature nature of their response” to the US-based fund manager’s calls for strategy changes and a plan to spin off its oil business.

On Monday, Elliott accused the world’s largest mining company of failing to to deliver “optimal” value for shareholders and in a 10-page letter proposed that the company scrap its dual listing in London and Sydney, instead having one company with headquarters in Australia. However, BHP said the costs and risks associated with the proposal outweighed the benefits.

In a statement, Elliot said it struggled to understand the nature of BHP’s response given the detail it provided on its plan that it argued has the potential to unlock $46bn in value. The statement added:

Given the plan’s potential to unlock up to $46bn in value, we and no doubt other shareholders of BHP look forward to management providing a more thorough and reasoned assessment of the plan.

BHP shares in London were up 0.5 per cent on Tuesday while the shares listed in Sydney finished the day 1.2 per cent lower.