Jefferies & Co Gives BHP Billiton PLC Price Target With Potential 43.7% Upside

BHP ditching 'Billiton' in $10 million rebranding move

Elliott has carried out talks in the past month with investors holding tens of billions of dollars of BHP shares and believes there's "extremely broad and deep-rooted shareholder support" for an assessment of the petroleum division, the New York-based fund said Tuesday in a statement, without naming the shareholders.

Among their demands, Elliott Management wants to see BHP end their dual-listing, spin off oil and gas assets in the USA and increase returns to shareholders.

Elliott Management previously wanted BHP end the company's dual-listing for its equity, a move which could potentially make the company more approachable.

BHP Billiton boss Andrew Mackenzie has agreed to meet his tormentors at Elliott Advisers after the U.S. activist investor ramped up its criticism of the mining giant's "do-nothing approach", which some analysts felt was not totally justified.

On Monday, BHP launched a rebranding that drops Billiton from its logo and removes the three stylized blobs that have featured for years, in an advertising campaign that highlights its Australian heritage.

Andrew Mackenzie, CEO of BHP Billiton, has issued a fresh update on the company's progress to grow long-term shareholder value.

- Elliott called on BHP on April 10 to restructure its current corporate structure, which consists of a United Kingdom and an Australian company, and spin off its petroleum unit.

Mackenzie gave a speech to the conference on Tuesday where he reiterated his confidence in boosting the value of the company by up to 50% and nearly double the return on capital, through cutting costs and carefully managing assets.




"We acknowledge that the acquisitions that took us into this business were poorly timed, that we paid too high a price", Mackenzie said, pointing to a reduction in operating costs within the business.

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BHP has invested too much - $8 billion alone on petroleum exploration since 2002 that the fund says has produced nearly no return. BHP would also change its logo, he said.

Major growth projects valued at up to US$25 billion offer potential average returns of over 16 per cent at consensus prices.

Technology programs to improve safety, lower costs and unlock resource with an unrisked value of up to US$12 billion are among the most capital efficient options in the portfolio. While Elliott showed that BHP has invested $8 billion in petroleum exploration since 2002, and with little to nearly no return, one unfortunate reality may simply be that BHP can not cost-effectively break all of the assets out with the current energy market prices.

It instead said BHP's management should work harder to find a solution to the legacy structure, which it said is obsolete and creates a long-running mismatch between the two shares.

BHP advanced 0.7 percent to close at 1,199 pence in London on Tuesday.

A number of equities analysts have recently commented on BBL shares.

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