BHP to go ahead with London-listing of demerged $15bn firm

BHP to go ahead with London-listing of demerged $15bn firm

CEO Andrew Mackenzie’s decision reportedly upset a few British investors.

BHP Billiton (ASX, NYSE:BHP) (LON:BLT) is set to offer a secondary listing in London for the spin-off company the world’s largest miner is creating as part of a corporate break-up.

The company formed by one of the industry’s landmark mergers, report WSJ.com, seems to have changed its mind about leaving the UK, especially as its London shares have fallen 13% since it announced its de-merger plan.

Apparently CEO Andrew Mackenzie’s decision upset a few British investors and led to accusations that the Scottish businessman was not treating all shareholders equally.

In a letter to investors on Wednesday, Jac Nasser, BHP’s chairman, said the group was “assessing a potential standard listing in London for the new company” after being “pleased by the support for the demerger and the level of interest investors have shown”.

Revised plan

Under the modified plan for the spin-off, which could attract a market valuation of up to $15bn, the new firm would still have its primary listing in Australia. There would then also be secondary listings in South Africa and the UK.

The unwanted assets to be grouped under a new company make up most of the former Billiton, including the aluminum, manganese and nickel operations, which contribution to the group earnings has fallen from almost 30% at the time of the merger to about 10% today.

The world’s No.1 mining company has been simplifying its portfolio for more than a decade, after the merger with Billiton set it on the way to becoming the world’s most valuable mining company,

BHP Billiton has a history of spinning off non-core assets. In 2002, it demerged its steel business, which subsequently became BlueScope Steel.

In May, the company announced a major shake-up of non-core operations beginning with its Western Australian Nickel West business. The news came on the heels of the creation of a new aluminum division, BHP Billiton Aluminum Pty Ltd.

Shareholders would have to approve any plan to demerge and spin off its non-core assets in a single unit.

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