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For the second time in four years, BHP Billiton Ltd., the world’s largest mining company — which holds its annual meeting in London Thursday — has announced plans that don’t include a Canadian share listing.
In the summer of 2010, BHP Billiton – the result of the 2001 merger between BHP and Billiton – launched a hostile bid for Potash Corporation of Saskatchewan Inc. It offered US$130 cash a share — a potential US$40-billion transaction.
At the time, BHP Billiton noted it had business interests in Canada dating back almost 40 years.
The most significant interest was EKATI, a diamond mine in which it had invested about US$5-billion since production began in 1998. BHP, which sold the EKATI mine in 2012, had also acquired exploration rights in potash, notably the Jansen mine.
But, perhaps as a reflection of the takeover consideration, BHP Billiton, which at the time had a market cap of US$188-billion, made no plans to list its shares on the TSX. However, late in the game when opposition to its takeover was mounting, it offered a secondary listing on the TSX to complement listings Australia, London, Johannesburg and New York. But its TSX-listing plans were shelved when the takeover was withdrawn after Ottawa nixed the deal after applying the net benefit test.
Four years on, thanks to the effects of the commodity cycle, the natural resources sector is in a different place. BHP has not revisited its PotashCorp plans, it has a new chief executive, it has deferred a number of projects and is now planning a restructuring.
Two months back, it announced plans to create a new “independent global metals and mining company” based on a selection of its “high-quality aluminum, coal, manganese, nickel and silver assets.” In effect, BHP Billiton is planning a demerger, which it deemed would unlock shareholder value “by significantly simplifying the BHP Billiton Group and creating two portfolios of complementary assets.”
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