BHP Billiton’s (LON:BLT) new chairman is about to shake things up at the world’s largest mining company, Bloomberg has reported. The news comes after the FTSE 100 group appointed Ken MacKenzie as its new chairman, amid calls from an activist investor to overhaul its board and operations.
BHP Billiton’s share price has been little changed in London in today’s session, having inched 0.12 percent to 1,248.00p as of 12:33 BST, slightly outperforming the benchmark FTSE 100 index which is currently 0.03 percent better off at 7,339.81 points. The group’s shares have added just under a third to their value over the past year, but have given up some four percent in the year-to-date.
Bloomberg quoted analysts at Sanford C. Bernstein as saying this week that BHP Billiton’s newly-appointed chairman Ken MacKenzie was likely to 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 September 1, of the new chairman,” analysts including Paul Gait said in a note, as quoted by the newswire, adding that they welcomed “the arrival of a chairman who is detached from industry pressures, can take a fresh look at the BHP portfolio”.
MacKenzie served as a CEO of packaging company Amcor between 2005 and 2015, before joining the BHP board in September last year. His appointment as chairman came after activist investor Elliott Management recently urged the company to ‘upgrade’ its board of directors. The hedge fund has further urged BHP to overhaul its business, and has proposed a demerger of the group’s US petroleum business.
Bloomberg quoted Bernstein’s Gait as commenting that the FTSE 100 miner “is not the natural owner of oil assets, as we see no obvious synergies between mining and petroleum production”.
“Splitting the two businesses apart, on the other hand, could allow the disclosure of their full value,” the analyst pointed out.