BHP Billiton +3% as Elliott urges spinoff of oil business

|About: BHP Billiton Limited (BHP)|By:, SA News Editor

BHP Billiton (NYSE:BHP+3.2% premarket after activist investor Elliott Management targets the company, urging it to spin off its U.S. petroleum assets and unify its dual U.K.-Australia structure.

Elliott, which says it owns a 4.1% stake in BHP, says its plan would enable BHP's management to provide shareholders with an increase in value of up to ~49% on the Australia-listed shares and 51% on the U.K.-listed shares.

"Despite being a leading global resources company with a portfolio of best-in-class large-scale diversified mining assets, in recent years BHP as an investment has underperformed a portfolio of comparable mineral and petroleum companies," Elliott Management says in a letter to BHP's board.

In a response, BHP says the costs and risks of Elliott's proposal would significantly outweigh any potential benefits.