Any significant changes to the corporate structure of Anglo-Australian miner BHP Billiton (BHP.AX) (BLT.L) would need to be consistent with a “national interest” test under the law, the Australian government said on Tuesday.
Activist shareholder Elliott Advisors on Monday proposed BHP Billiton scrap its dual-company structure in favor of a primary listing in London and a secondary listing in Sydney.
“A change in the corporate structure and listing arrangement would need to be carefully considered against the provisions of the Foreign Acquisitions and Takeovers Act,” a spokeswoman for Australian Treasurer Scott Morrison said on Tuesday.
The Australian government in 2001 approved the merger of Melbourne-based BHP and London-based Billiton based on a number of conditions designed to ensure the miner kept close ties to Australia.
BHP Billiton on Monday said the Elliott proposal, which involves replacing the dual-listed company with a single company domiciled in Britain, would require the approval of Australia’s Foreign Investment Review Board.
In presentation slides, Elliott said the changes in the listing structure would add $1.50 of value per BHP Billiton share for the holders of London-listed shares but take away $1 in value from the holders of the Australian-listed shares.
The bulk of Elliott’s BHP Billiton shareholding is in the U.K.-listed arm, in which it holds a stake of 4.1 percent. It has rights to acquire an interest of up to 0.4 percent in the Australian-listed arm.
Elliott also proposed that BHP Billiton split off its U.S. oil and gas division, a move the company has rejected previously.
(Reporting by Jamie Freed; Editing by Clarence Fernandez)