BHP Demerger: Second Thoughts

When I first read of the proposed BHP demerger and the creation of a new company, South32, my first thoughts about it were negative:  why should this be any more successful that the two previous demergers, BHP Gold and BHP Steel?  However, on reading the reports of two analysts that I respect, my attitude has changed, and these reports – along with a bit of stirring of commodity prices – now leads me to think that Jac Nassar and his cohorts have planned the demerger well, giving the fledgling company sufficient resources to make a go of it.  Financially that should have sufficient funds,  a sought after range of commodities, a good management team and a board of directors up to the task.

BHP results have not been good over the past few years and it is hoped that this demerger will release the shackles a bit and make BHP a more dynamic, and successful company.

If this happens, it will be a win-win situation for all shareholders.

if you have changed your mind about taking up the share sale facility offered by BHP to enable you to off loan your South32 shares, please let us know.  The decision needs to be made by 20th May 2015.

Steve

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