BHP’s New Chairman Expected to Drive a ‘Radical Shift’ – by Jasmine Ng (Bloomberg News – July 5, 2017)

BHP Billiton Ltd.’s new chairman is about to shake things up at the world’s largest mining company, according to Sanford C. Bernstein Ltd., which says that Ken MacKenzie will probably undertake a full-scale review of assets and strategy, and may demerge the petroleum business.

“Despite management’s reluctance to change at this stage, we believe that BHP is about to experience a radical shift in strategy, driven by the arrival, effective Sept. 1, of the new chairman,” analysts including Paul Gait said in a note.

MacKenzie used to run a packaging business, and his “detachment from the mining sector makes him, we believe, inevitably far more objective on the best direction BHP should take from now on.” BHP has been the target of an activist investor campaign in recent months spearheaded by Elliott Management Corp., which has rounded on management decisions that the fund claims have destroyed about $40 billion in value.

MacKenzie’s arrival to replace Jacques Nasser has been welcomed by Elliott, and Bernstein said it understands that the investor and MacKenzie share common views on the future of the company.

“We welcome the arrival of a chairman who is detached from industry pressures, can take a fresh look at the BHP portfolio and is unencumbered by the need to defend legacy investment decisions and portfolio/commodity choices,” Gait said, upgrading BHP to outperform.

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