BHP Billiton to pursue demerger interface with no share listing in Canada | Financial Post
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For the second time in four years, BHP Billiton Ltd., the world s largest mining company which holds its annual meeting in London Thursday has announced plans that don t include a Canadian share listing.
In the summer of 2010, BHP Billiton the result of the 2001 merger between BHP and Billiton launched a hostile bid for Potash Corporation of Saskatchewan Inc. It offered US$130 interface cash a share a potential US$40-billion transaction.
But, perhaps as a reflection of the takeover consideration, BHP Billiton, which at the time had a market cap of US$188-billion, made no plans to list its shares on the TSX. However, late in the game when opposition to its takeover was mounting, it offered a secondary listing on the TSX to complement listings Australia, London, Johannesburg and New York. But its TSX-listing plans were shelved when the takeover was withdrawn after Ottawa nixed the deal after applying the net benefit test.
Four years on, thanks to the effects of the commodity cycle, the natural resources sector is in a different place. BHP has not revisited its PotashCorp plans, it has a new chief executive, it has deferred a number of projects and is now planning a restructuring.
Two months back, it announced plans to create a new independent global metals and mining company based on a selection of its “high-quality aluminum, coal, manganese, nickel and silver assets. In effect, BHP Billiton is planning a demerger, which it deemed would unlock shareholder value by significantly simplifying the BHP Billiton Group and creating two portfolios of complementary assets.
The end result: BHP Billiton would be almost exclusively focused on its exceptionally interface large, long-life iron ore, copper, coal, petroleum and potash basins. The new company would have a different mix of assets, its own board and management. BHP Billiton s shareholders would receive all the shares of the new company.
At the time, the plan was to list the shares interface of the new company in Australia as well as having what s known as an inward secondary listing in Johannesburg. The new company has been valued at US$17 billion. It s understood BHP made that decision because most of the assets and most of the share trading occurs in Australia and South Africa.
But U.K. investors reacted, even though the shares of the new company weren t expected to be included in the index. Recently, BHP Billiton changed its tack and said it will pursue a standard listing on the LSE.
It seems a number of factors were involved: costs, interface share ownership and liquidity. And size: at US$17 billion the new company would be the third largest miner on the TSX behind only PotashCorp (market cap of US$27-billion) and Goldcorp Inc. (US$18-billion.)
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For the second time in four years, BHP Billiton Ltd., the world s largest mining company which holds its annual meeting in London Thursday has announced plans that don t include a Canadian share listing.
In the summer of 2010, BHP Billiton the result of the 2001 merger between BHP and Billiton launched a hostile bid for Potash Corporation of Saskatchewan Inc. It offered US$130 interface cash a share a potential US$40-billion transaction.
But, perhaps as a reflection of the takeover consideration, BHP Billiton, which at the time had a market cap of US$188-billion, made no plans to list its shares on the TSX. However, late in the game when opposition to its takeover was mounting, it offered a secondary listing on the TSX to complement listings Australia, London, Johannesburg and New York. But its TSX-listing plans were shelved when the takeover was withdrawn after Ottawa nixed the deal after applying the net benefit test.
Four years on, thanks to the effects of the commodity cycle, the natural resources sector is in a different place. BHP has not revisited its PotashCorp plans, it has a new chief executive, it has deferred a number of projects and is now planning a restructuring.
Two months back, it announced plans to create a new independent global metals and mining company based on a selection of its “high-quality aluminum, coal, manganese, nickel and silver assets. In effect, BHP Billiton is planning a demerger, which it deemed would unlock shareholder value by significantly simplifying the BHP Billiton Group and creating two portfolios of complementary assets.
The end result: BHP Billiton would be almost exclusively focused on its exceptionally interface large, long-life iron ore, copper, coal, petroleum and potash basins. The new company would have a different mix of assets, its own board and management. BHP Billiton s shareholders would receive all the shares of the new company.
At the time, the plan was to list the shares interface of the new company in Australia as well as having what s known as an inward secondary listing in Johannesburg. The new company has been valued at US$17 billion. It s understood BHP made that decision because most of the assets and most of the share trading occurs in Australia and South Africa.
But U.K. investors reacted, even though the shares of the new company weren t expected to be included in the index. Recently, BHP Billiton changed its tack and said it will pursue a standard listing on the LSE.
It seems a number of factors were involved: costs, interface share ownership and liquidity. And size: at US$17 billion the new company would be the third largest miner on the TSX behind only PotashCorp (market cap of US$27-billion) and Goldcorp Inc. (US$18-billion.)
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