BHP - Astonishing result

[PSE]

Yes BHP is an economic juggernaut and very safe in terms of debt /low cost iron ore reserves etc, the price of oil will rise long term and fluctuate short term. I have had this sort of argument with daytr previously on another thread.
We could change to renewables these are lower cost than fossil fuels but I can't see it happening anytime soon, as investors our decisions are important but the numbers have to stack up.

[Daytr]

Macduffy I hope you aren't relying on Etrade's market Cap figure as I made the same mistake & I was mildly bearish then.
At $33.57 share price BHPs market cap is a whopping A$176BILLION ! So if you weren't that impressed before, what do you think now.

PSE I think BHP was an economic juggernaut for about 5 years or so. Take out a few horrendous decisions & write offs from time to time.
However them & RIO & Vale have killed the iron ore market out of share ego.
And Saudi Arabia is doing to them in oil what they have tried to do to others in the iron ore market.

I can just see this spin off being a complete give away for current shareholders as well.

[macduffy]

Yes, I'm certainly impressed by $176b!

The $108b number comes from The Age - the Aussie newspaper. I suspect that they don't include the UK-listed Billiton part of the company - or some such "technicality".

Re the proposed 32South spin off, my understanding is that BHP shareholders will receive proportional shareholdings in the new company. Theoretically, that shouldn't affect the overall combined shareprice - which should equal the pre-distribution BHP shareprice. In practice though there probably will be some effect as shareholders weigh the prospects of the two companies and favour one or the other, buying or selling accordingly.

[macduffy]

Further to my post #130, here's the latest I could find on the demerger. Note that BHP Billiton Ltd and BHP plc shareholders will receive 100% of the shareholding of the spinoff company, 32South.

http://www.asx.com.au/asxpdf/2014112...ztqrgzh1vv.pdf

[Daytr]

I think you have misinterpreted the announcement it says BHP shareholders will be entitled to 100% of he shares in the new company.
I think what that is saying is that BHP shareholders will have first dibs on buying shares in the new company.
My guess is you will have to pay for the same assets twice. I've seen it done over & over & to be honest I'm not sure how its even legal.

[macduffy]

I don't think so.

From the announcement: "......Shareholders will be entitled to 100% of the shares in the new company through a pro-rata in-specie distribution....."

"In-specie" distributions are similar to bonus issues and dividends in that they are proportional to shareholdings. I've never seen an in-specie distribution that had to be paid for by the shareholder but we'll know soon enough. Documentation is due to be released mid-March.

[macduffy]

I don't think so.

From the announcement: "......Shareholders will be entitled to 100% of the shares in the new company through a pro-rata in-specie distribution....."

"In-specie" distributions are similar to bonus issues and dividends in that they are proportional to shareholdings. I've never seen an in-specie distribution that had to be paid for by the shareholder but we'll know soon enough. Documentation is due to be released mid-March.

[BlackPeter]

Just shorted.
I bet the demerger is crap for share holders to.
Typically they give it away!

I can just see this spin off being a complete give away for current shareholders as well.

My guess is you will have to pay for the same assets twice. I've seen it done over & over & to be honest I'm not sure how its even legal.

Daytr, not quite sure what you intend to say ... your messages seem to be (despite all being quite negative) somewhat inconsistent - and certainly not in alignment with what the company says (have a look through the latest annual report) about the intended demerger.

As well - share holders will have to vote for the proposed demerger, so if we don't like it, we just vote it down, wouldn't we?

Just wondering - is your shortening exercise clouding your mind - or are you trying to mislead others?

[kanaka]

Further to my post #130, here's the latest I could find on the demerger. Note that BHP Billiton Ltd and BHP plc shareholders will receive 100% of the shareholding of the spinoff company, 32South.

http://www.asx.com.au/asxpdf/2014112...ztqrgzh1vv.pdf

When I purchased BHP late last year I did a bit of research on why the share price dropped from AUD40 to AUD33 and came to the conclusion it was selling pressure out of the UK as the PLC shareholders would not be in the same position as the LTD shareholders in the divvying out of the new company. Could be wrong - usually am but it seemed a nice thing to own LTD shares. And then along came the oil crash

[Daytr]

Actually there is no inconsistency in what I said, I suggest you just misunderstood it.
By paying for it twice its the equivalent of giving it away.
I.e. paying 100% for something you already own or give it away, its the same effect.

I was involved in a similar exercise & foolishly I thought management would look after shareholders, but they spun out the new assets & if you wanted to participate you had to buy shares in the new company. Its a bit different here as they are off loading mostly what they don't want, but they will need cash in the new company & that's how they raise it by selling the shares. So effectively its like a giant capital raising but all the funds stay in the new entity & the original owner only gets a right to participate. Well that's how I read it anyway.

Good volatility this morning closed out my short on the thumping on the open & then reinstated at higher levels! ;=)

We saw a huge rally in oil overnight. Absolutely suckered by the Saudis soothing words.
What a load of BS, they are pumping more whilst they say it & the dumb market bought every word.
Shorted oil this morning as well.

Daytr, not quite sure what you intend to say ... your messages seem to be (despite all being quite negative) somewhat inconsistent - and certainly not in alignment with what the company says (have a look through the latest annual report) about the intended demerger.

As well - share holders will have to vote for the proposed demerger, so if we don't like it, we just vote it down, wouldn't we?

Just wondering - is your shortening exercise clouding your mind - or are you trying to mislead others?