Tribeca plans to target BHP board overhaul

Bloomberg

BHP Billiton Ltd.’s board is being targeted for a sweeping overhaul by Tribeca Global Natural Resources Fund, opening a potential new front in the burgeoning activist campaign against the world’s biggest mining company.
The Sydney-based hedge fund, which last month joined billionaire Paul Singer’s Elliott Management Corp. in calling for changes aimed at shifting strategy at BHP, believes about five or six members of the 11-person board need to be replaced, portfolio manager Craig Evans said on Tuesday in a phone interview. BHP declined to comment.
“It appears there’s been no significant and sensible debate on issues at a board level and part of that is because there’s no-one with substantial technical and operational experience that is challenging senior management on some of these issues,” Evans said.
Tribeca has said the fund holds BHP’s London and Sydney traded shares, without disclosing the size of its holdings. Elliott spokesman Michael O’Looney declined to comment on whether the fund also plans to propose the replacement of existing directors. New York-based Elliott last month struck an agreement to name three
directors to the board of metals manufacturer Arconic Inc. amid a camp-
aign criticizing under-performance at
the producer.
BHP declined 1.4 percent to A$23.34 in Sydney trading on Tuesday, extending its decline this year to 6.9 percent. Activist investors have gone public since April with attacks on BHP over what they regard as misjudged shale acquisitions, poorly timed share buybacks and disappointing exploration results. Singer’s Elliott argues BHP’s leadership has destroyed $40 billion in value and last month called for an independent review of the producer’s $22.5 billion petroleum division.
Tribeca would have sufficient support from fellow investors to seek a vote on the replacement of existing board members with alternative candidates, Evans said. “We’d prefer to not need to go down that path,” he said. Potential alternative directors who are in discussions with Tribeca have experience in either the mining or petroleum sectors, or both industries, and include Australian and international candidates, said Evans, who declined to identify the individuals as discussions are private.
“They are people with decades of experience in the sector, and who’ve been extremely successful CEOs as well,” Evans said. “That’s our biggest focus at the moment, trying to get more commodities and technical experience on to that board with people who’ve done that in a savvy way within companies.”
Tribeca intends to approach BHP and its board to initiate a discussion about a process to replace some incumbent directors and would move to a public campaign only if the Melbourne-based producer is unresponsive, according to Evans.