BHP wants to leave the London Stock Exchange

It’s a shock for the British market. The mining giant BHP is considering abandoning the listing in London in favor of a single listing in Sydney. The Anglo-Australian company, present in the United Kingdom for twenty years after its merger with Billiton, is competing with AstraZeneca for the title of the largest market capitalization of Footsie 100. BHP weighs 100 billion pounds sterling. Its weight in the index is however reduced (it ranks in tenth place) due to its double rating.

“Losing such a heavyweight is a real setback, acknowledges Neil Wilson of to Bloomberg, but it will rebalance the FTSE a bit 100 by reducing the natural resource bias. A little less mining and a little more tech stocks wouldn’t be so bad ”. On the London Stock Exchange, BHP gained up to 9, 82 before ending the session up 3.4% .

A single listing already considered Such a change is far from trivial for the London stock operator. The LSE (London Stock Exchange) seeks to attract companies in a delicate context linked to Brexit. Other giants, like Rio Tinto or Glencore are still listed in London. A single “listing” would also be a big blow to investors. Asset managers and index funds would be forced to part with BHP securities.

In 2017 already, BHP had started thinking about it. The activist fund Elliott Advisors had urged the group to simplify its listing structure. According to the fund, such a change would have ended the discount between the share price in London and Sydney, reduced costs and brought a little more transparency.

The abandonment of the London listing is not, however, a given because the project must be approved by the shareholders. Faced with the bronca of investors in 2017, Unilever had for example had to give up a single listing in Rotterdam. In the case of BHP, it will be necessary to obtain the agreement of 75% of the shareholders present at an extraordinary meeting.

Exceptional results The single listing project was announced on the occasion of the publication of the mining giant’s results. Its current profit reached 17, 08 billion dollars for the year 2021, the highest in ten years. Like other groups in the sector, BHP has benefited from the surge in raw materials, driven by recovery plans and the energy transition. The company derives most of its income from iron ore and copper. These two metals have set historical records at over 200 dollars per tonne for iron and at more of 10. 500 dollars per ton for copper.

BHP has also confirmed the sale of its hydrocarbons branch at Woodside. Finally, BHP has announced its intention to continue development of the Jansen Potash Project in Canada, with an initial investment estimated at $ 5.7 billion. This involves diversifying the company’s portfolio and refocusing it on the raw materials of ecological transition.