Elliott Management investment in BHP in 2017

Elliott Management invested in BHP in 2017 and made public a presentation for it. If you are interested to learn about how hedge funds write presentations, here is one for you to learn from.

About the Elliott Management deck(s)

All information is public information (I won’t share anything confidential on this site).

Deck one

This is the initial deck Elliott Management shared on BHP.

Deck two

This is the second deck Elliott Management shared on BHP.

About the deal

In 2017, Elliott Management, a prominent activist investment firm, disclosed a significant stake in BHP, one of the world’s largest mining and resources companies. Elliott Management’s investment was notable not just for its size but for the strategic changes it sought to implement within BHP to unlock shareholder value.

Elliott proposed a range of operational, financial, and strategic reforms aimed at improving BHP’s performance and market valuation. One of the key suggestions was the unification of BHP’s dual-listed company structure into a single entity, which Elliott argued would create efficiencies and reduce complexities and costs. Additionally, Elliott advocated for the spin-off of BHP’s US petroleum business to allow a more focused approach on its core mining business, suggesting that this separation could unlock value for shareholders.

Elliott Management also recommended improvements in capital allocation and an increased return of capital to shareholders. They argued that BHP had underperformed relative to its potential and that these strategic changes would significantly enhance shareholder value.

BHP responded to Elliott’s proposals by defending its corporate structure and strategy, stating that the suggested reforms would not be in the best interests of shareholders. The company highlighted its track record of delivering shareholder returns and its strategic plans for future growth and efficiency.

The engagement between Elliott Management and BHP was a high-profile example of activist investing, with Elliott leveraging its investment to initiate public discussions and debates over the best strategies for maximizing shareholder value in large, complex organizations. While not all of Elliott’s proposals were adopted, the investment underscored the influence that activist investors can exert on global corporations, sparking discussions on corporate governance, strategy, and value creation.

About Elliott Management

Elliott Management Corporation is a prominent American hedge fund founded by billionaire investor Paul Singer in 1977. With headquarters in New York City, Elliott is known for its activist investing approach, which involves taking significant stakes in companies and then actively engaging with management to push for changes aimed at increasing shareholder value. The firm has gained a reputation for its aggressive tactics and willingness to challenge corporate boards, often through shareholder activism campaigns and legal battles.

Over the years, Elliott Management has been involved in numerous high-profile activist campaigns targeting companies across various industries, including technology, finance, and energy. Some of its notable campaigns include pushing for strategic changes at companies like EMC Corporation, Compuware Corporation, and Arconic Inc. Elliott is also known for its involvement in distressed debt investing, where it acquires the debt of struggling companies and seeks to restructure their operations for profit. With its track record of successful activist interventions and its substantial assets under management, Elliott Management continues to be a significant player in the world of finance and investment.

About BHP

Headquartered in Melbourne, Australia, BHP, formerly known as BHP Billiton, stands as one of the foremost diversified natural resources companies globally, boasting a significant presence across various sectors such as mining, metals, and petroleum. With operations spanning the globe, BHP plays a pivotal role in the production of vital commodities including iron ore, copper, coal, petroleum, and nickel, contributing significantly to global supply chains and economic development. Its extensive portfolio comprises mines, refineries, processing facilities, and oil and gas fields strategically located in diverse regions, ensuring a robust and resilient operational footprint.

Renowned for its commitment to sustainable development and responsible business practices, BHP places a strong emphasis on minimizing its environmental footprint while maximizing positive social contributions in the communities where it operates. This dedication underscores BHP’s recognition of the importance of environmental stewardship and community engagement in the resources sector. With a storied history dating back to the 19th century, BHP has earned its reputation as a leader in the global resources industry, continually driving innovation, efficiency, and long-term value creation while upholding the highest standards of corporate governance and sustainability.

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