New BHP Chairman Set to Anger Elliott Management

This morning, BHP Billiton Ltd [ASX:BHP] announced their new chairman. Ken MacKenzie will replace outgoing chairman, Jac Nasser.

MacKenzie will effectively become chairman as of 1 September 2017. He’s been with the big miner for over a year. Before that he was chief executive of packaging giant, Amcor Ltd [ASX:AMC], from 2005.

MacKenzie was appointed chief of Amcor at a difficult time. The packaging giant had been caught up in a price fixing scandal. Yet, throughout his tenure, the stock appreciated more than 120%. As a comparison, the ASX 200 was up only 32% over the same period.

Of course the company’s success wasn’t all MacKenzie’s doing. But he likely played a large role.

Mackenzie committed to improving BHP Share Price

As you would expect any incoming chairman to say, MacKenzie is committed to improving value to BHP shareholders:

I am committed to the creation of long-term value for all of our shareholders and will work tirelessly with the board and management to achieve this.

Yet, activist hedge fund, Elliott Management likely won’t be happy with the change. Elliott has been pressuring BHP to buy back shares and divest from its petroleum assets.

More recently, they’ve called for a board change. They called for BHP to appoint a chairman who is strong, experienced and a visionary.

According to the Australian Financial Review:

There had been speculation that the hedge fund, owned by billionaire Paul Singer, was pushing for Dow Chemical’s boss Andrew Liveris to be parachuted into the chairman role.

The appointment of a chairman from within the BHP boardroom may will prompt more criticism from Elliott in the coming days.


Härje Ronngard,

Junior Analyst, Money Morning

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