Elliott Management has deep concerns over BHP Billiton’s (LON:BLT) plans to enter the fertiliser market, Reuters has reported. The comments come with the activist investor continuing its campaign for an overhaul of the miner’s strategy and board.
BHP Billiton’s share price has been little changed in London in today’s session, having added 0.05 percent to 1,322.50p as of 14:40 BST. The stock, however, is underperforming the blue-chip FTSE 100 index which is currently 0.75 percent up at 7,486.40 points. The group’s shares have added more than 42 percent to their value over the past year, but are up by just over one percent in the year-to-date.
Reuters reported today that New York-based Elliott had said that it had shared concerns raised by shareholders and analysts that BHP Billiton’s planned push into potash could be a strategic misstep. The Anglo-Australian mining giant has signalled it may push ahead with its long-dormant Jansen potash mine in Canada in an effort to capture part of what it expects to become a $50 billion-a-year market by the mid-2040s.
“BHP is now arguing that it should spend billions of dollars of shareholder money to diversify into potash,” an Elliott spokesman said in an email to the newswire, adding that the move sounded “alarmingly familiar and comes as the company proclaims the dubious strategy of thinking big – a concept that has been disastrous for BHP shareholders,” referring to an advertising slogan recently adopted by the FTSE 100 group.
Elliott has already urged BHP to overhaul its business, calling for the end of the miner’s dual structure which has the company based both in London and Sydney, and has proposed a demerger of the group’s US petroleum business.