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BHP Group (BHP)

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Dod101
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Re: BHP Group (BHP)

#429420

Postby Dod101 » July 21st, 2021, 7:16 pm

Bouleversee wrote:I hope they will not be allowed to sell them to the Chinese.


Help to educate them.

Dod

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Re: BHP Group (BHP)

#430758

Postby daveh » July 27th, 2021, 4:58 pm

BHP buys a metals resource company - pre production of the resources for C$325m at a premium of 129% to the unaffected share price.

https://www.investegate.co.uk/bhp-group ... 49296375G/

Recommended all-cash offer for Noront Resources Limited

Today, BHP Lonsdale Investments Pty Ltd (BHP Lonsdale), a wholly-owned subsidiary of BHP Group Limited, announced that BHP Western Mining Resources International Pty Ltd (BHP WMR), a wholly-owned subsidiary of BHP Lonsdale, has made a recommended all-cash offer to acquire all of the issued and outstanding common shares of Noront Resources Limited (Noront) for C$0.55 per share in cash.

BHP Lonsdale, BHP WMR and Noront have entered into a definitive support agreement, whereby Noront has agreed to, among other things, support the takeover-bid by BHP WMR.

Noront is a Canadian based mining company, listed on the TSX Venture Exchange. It is focused on the development of its high-grade Eagle's Nest nickel, copper, platinum and palladium deposit and chromite deposits including Blackbird, Black Thor, and Big Daddy, all of which are located in the James Bay Lowlands of Ontario in an emerging metals district known as the Ring of Fire

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Re: BHP Group (BHP)

#433998

Postby minerjoe » August 11th, 2021, 11:26 am

Dod101 wrote:I have no interest in BHP but at the same time, they say they will exit fossil fuels. I wonder how their trucks and machinery for their mining activities are fuelled? Bet it is not all electric or hydrogen.

Dod


Dod, the fuel burn is nothing compared to the Scope 3 emissions from the iron ore being smelted after it has been mined. As an FYI I worked for a while at a mine in the states that moved 500,000t per day with a fleet of 90 trucks - the fuel spend was eye watering

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Re: BHP Group (BHP)

#435030

Postby idpickering » August 16th, 2021, 7:19 am

Response re press speculation on Petroleum business

BHP notes the recent press speculation regarding our Petroleum business. As previously stated, BHP regularly reviews its portfolio of assets in order to seek opportunities to maximise long-term shareholder value.

BHP confirms that we have initiated a strategic review of our Petroleum business to re-assess its position and long-term strategic fit in the BHP portfolio. A number of options are being evaluated. One option is a potential merger of the Petroleum business with Woodside Petroleum Ltd (Woodside) and a distribution of Woodside shares to BHP shareholders. We confirm that we have been in discussions with Woodside. While discussions between the parties are currently progressing, no agreement has been reached on any such transaction.

A further announcement will be made as and when appropriate.

https://www.investegate.co.uk/bhp-group ... 00096755I/

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Re: BHP Group (BHP)

#435263

Postby idpickering » August 17th, 2021, 7:52 am

Woodside and BHP to create a global energy company

Woodside Petroleum Ltd ("Woodside") and BHP Group ("BHP") have entered into a merger commitment deed to combine their respective oil and gas portfolios by an all‑stock merger (the "Transaction") to create a global top 10 independent energy company by production.

On completion of the Transaction, BHP's oil and gas business would merge with Woodside, and Woodside would issue new shares to be distributed to BHP shareholders. The expanded Woodside would be owned 52 per cent by existing Woodside shareholders and 48 per cent by existing BHP shareholders. The Transaction is subject to confirmatory due diligence, negotiation and execution of full form transaction documents, and satisfaction of conditions precedent including shareholder, regulatory and other approvals.

With the combination of two high quality asset portfolios, the proposed merger would create the largest energy company listed on the ASX, with a global top 10 position in the LNG industry by production. The combined company will have a high margin oil portfolio, long life LNG assets and the financial resilience to help supply the energy needed for global growth and development over the energy transition.

Attractive strategic and financial rationale

The combination of Woodside and BHP's oil and gas business is expected to deliver substantial value creation for both sets of shareholders from across a range of areas, including:

· Greater scale and diversity of geographies, products and end markets through an attractive and long-life conventional portfolio

· Resilient, high margin operating cash flows to fund shareholder returns and business evolution to support the energy transition

· Strong growth profile with a plan to achieve targeted Scarborough FID in the 2021 calendar year and capacity to phase the most competitive, high-return options within the portfolio

· Proven management and technical capability from both companies

· Shared values and focus on sustainable operations, carbon management and ESG leadership

· Estimated synergies of more than US$400 million (100 per cent basis, pre-tax) per annum from optimising corporate processes and systems, leveraging combined capabilities and improving capital efficiency on future growth projects and exploration

· Greater financial resilience, relative to Woodside's and BHP's standalone petroleum businesses.


https://www.investegate.co.uk/bhp-group ... 49258725I/

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Re: BHP Group (BHP)

#435266

Postby idpickering » August 17th, 2021, 8:02 am

Results for the Year Ended 30 June 2021

Here; https://www.investegate.co.uk/bhp-group ... 51118723I/

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Re: BHP Group (BHP)

#435267

Postby idpickering » August 17th, 2021, 8:05 am

BHP approves investment in Jansen Stage 1 potash project

BHP has today approved US$5.7 billion (C$7.5 billion) in capital expenditure for the Jansen Stage 1 (Jansen S1) potash project in the province of Saskatchewan, Canada.

BHP Chief Executive Officer, Mike Henry, said Jansen is aligned with BHP's strategy of growing our exposure to future facing commodities in world class assets, which are large, low cost and expandable.

"This is an important milestone for BHP and an investment in a new commodity that we believe will create value for shareholders for generations," Mr Henry said. Jansen is located in the world's best potash basin and is expected to operate up to 100 years. Potash provides BHP with increased leverage to key global mega-trends, including rising population, changing diets, decarbonisation and improving environmental stewardship.


https://www.investegate.co.uk/bhp-group ... 52148728I/

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Re: BHP Group (BHP)

#435277

Postby scrumpyjack » August 17th, 2021, 8:26 am

I note that they are going to get rid of the dual share structure (as Unilever did), but it is the UK Plc that will cease to exists. We will get shares in the Australian company. This may be beneficial for anyone who pays tax on dividends as the dividends will be 'franked', ie be treated as having had 15% Australian tax paid, which can be offset against any UK tax liability on the dividend. That will be the position if my understanding is correct (but I could be wrong).

Incidentally the dividend declared today is 200 cents compared to 120 cents last year. Ex 2/9, Pay 21/9

share price up nearly 10%

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Re: BHP Group (BHP)

#435309

Postby MDW1954 » August 17th, 2021, 10:16 am

scrumpyjack wrote:I note that they are going to get rid of the dual share structure (as Unilever did), but it is the UK Plc that will cease to exists. We will get shares in the Australian company. This may be beneficial for anyone who pays tax on dividends as the dividends will be 'franked', ie be treated as having had 15% Australian tax paid, which can be offset against any UK tax liability on the dividend. That will be the position if my understanding is correct (but I could be wrong).

Incidentally the dividend declared today is 200 cents compared to 120 cents last year. Ex 2/9, Pay 21/9

share price up nearly 10%



The shares will be listed in London, as now. Operationally, I'm not sure what difference it will make to shareholders, but (as always) the devil is in the detail.

MDW1954

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Re: BHP Group (BHP)

#435348

Postby AJC5001 » August 17th, 2021, 12:23 pm

scrumpyjack wrote:I note that they are going to get rid of the dual share structure (as Unilever did), but it is the UK Plc that will cease to exists. We will get shares in the Australian company. This may be beneficial for anyone who pays tax on dividends as the dividends will be 'franked', ie be treated as having had 15% Australian tax paid, which can be offset against any UK tax liability on the dividend. That will be the position if my understanding is correct (but I could be wrong).


I hold my BHP shares in an ISA where there is no tax liability currently. Does this mean I will lose the 15% Australian tax as it cannot be reclaimed?

Adrian

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Re: BHP Group (BHP)

#435366

Postby scrumpyjack » August 17th, 2021, 1:11 pm

AJC5001 wrote:
scrumpyjack wrote:I note that they are going to get rid of the dual share structure (as Unilever did), but it is the UK Plc that will cease to exists. We will get shares in the Australian company. This may be beneficial for anyone who pays tax on dividends as the dividends will be 'franked', ie be treated as having had 15% Australian tax paid, which can be offset against any UK tax liability on the dividend. That will be the position if my understanding is correct (but I could be wrong).


I hold my BHP shares in an ISA where there is no tax liability currently. Does this mean I will lose the 15% Australian tax as it cannot be reclaimed?

Adrian


As I understand the Australian dividend taxation system, no you will lose nothing. It is a bit like the system we used to have in the UK of tax credits.
The dividend comes 'franked' which means it includes a notional amount of tax which is part of the Corporation tax that the company has paid, to avoid double taxation. So the company is not 'deducting' any tax before paying you the dividend, you are simply getting a credit for part of the corporation tax the company pays anyway.

https://www.etax.com.au/franked-dividen ... g-credits/

In the UK this tax cannot be reclaimed but it can be set off against the UK tax on that dividend.

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Re: BHP Group (BHP)

#435372

Postby scrumpyjack » August 17th, 2021, 1:32 pm

This is confirmed by the report in the Investors Chronicle which says

""Making 'Ltd' the sole BHP would “result in franked distributions being paid directly to all BHP shareholders”, the company said, allowing some investors to realise gains from dividend tax relief. Franking credits are in place to avoid double taxation of profits, given companies pay tax on profits before handing them to shareholders.

In other words holders in tax free accounts like ISAs or SIPPs won't lose anything but holdings in taxable accounts will gain.

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Re: BHP Group (BHP)

#435425

Postby tjh290633 » August 17th, 2021, 4:04 pm

This is analogous with S32, where a UK investor receives the dividend as declared. Mine are in an ISA so there is no taxation issue. Presumably outside a tax shelter the dividends count as foreign income, where any double taxation provisions come into play.

BHP will leave the FTSE100 of course.

TJH

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Re: BHP Group (BHP)

#435441

Postby idpickering » August 17th, 2021, 4:52 pm

Mining giant to leave London's FTSE 100 for Sydney



Mining giant BHP is set to leave the FTSE 100 index after unveiling plans to scrap the dual listing of its shares in London and Sydney.

The company, part of the UK's blue chip index since 2001, will move its main listing to Australia as part of a huge shake up announcement on Tuesday.

BHP regularly tops the list of the FTSE 100's biggest companies, depending on fluctuations in market values.

The move will see some investor funds that track the FTSE sell BHP shares.

"Now is the right time to unify BHP's corporate structure," said Ken MacKenzie, chairman of the world's biggest listed mining comany. "BHP will be simpler and more efficient, with greater flexibility to shape our portfolio for the future.

"Our plans announced today will better enable BHP to pursue opportunities in new and existing markets and create value and returns over generations."

The move comes as BHP announced it was combining its oil and gas assets with Australia's Woodside, creating one of the world's 10 biggest producers of liquified natural gas.

BHP's chief executive, Mike Henry, is trying the shift the company's focus towards metals such as copper and nickel, and away from fossil fuels. BHP has also put its last thermal coal mine up for sale.


https://www.bbc.co.uk/news/business-582 ... %20Tuesday.

imho, a bit of a sad day. TBH. I'm not keen on holding a share such as BHP Group that'd only be listed in Australia rather than here on LSE in my HYP (ISA). Or am I worrying about nothing? Hmm....

Ian.

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Re: BHP Group (BHP)

#435443

Postby Lootman » August 17th, 2021, 4:57 pm

tjh290633 wrote:This is analogous with S32, where a UK investor receives the dividend as declared. Mine are in an ISA so there is no taxation issue. Presumably outside a tax shelter the dividends count as foreign income, where any double taxation provisions come into play.

US investors won't like this as the UK applies no withholding tax for foreign investors but Australia does. So the UK shares are more valuable to a US investor and this is reflected in a price differential between the two. I wonder if we will see price dislocations as large US investors move between the two listings and/or try and arbitrage the price difference.

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Re: BHP Group (BHP)

#435450

Postby scrumpyjack » August 17th, 2021, 5:18 pm

Lootman wrote:
tjh290633 wrote:This is analogous with S32, where a UK investor receives the dividend as declared. Mine are in an ISA so there is no taxation issue. Presumably outside a tax shelter the dividends count as foreign income, where any double taxation provisions come into play.

US investors won't like this as the UK applies no withholding tax for foreign investors but Australia does. So the UK shares are more valuable to a US investor and this is reflected in a price differential between the two. I wonder if we will see price dislocations as large US investors move between the two listings and/or try and arbitrage the price difference.


Historically I think the shares of Australian BHP have traded at a premium to London BHP (and not the other way round) because the Australian shares dividends come with a tax credit. It is not a withholding tax. It is 'franked' because it is paid out of profits that have already been charged Australian corporation tax. So the tax is an extra benefit to the shareholder which in some jurisdictions may be offset against other tax liabilities. One reason Elliot was pushing for this a few years ago.

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Re: BHP Group (BHP)

#435452

Postby Lootman » August 17th, 2021, 5:33 pm

scrumpyjack wrote:
Lootman wrote:
tjh290633 wrote:This is analogous with S32, where a UK investor receives the dividend as declared. Mine are in an ISA so there is no taxation issue. Presumably outside a tax shelter the dividends count as foreign income, where any double taxation provisions come into play.

US investors won't like this as the UK applies no withholding tax for foreign investors but Australia does. So the UK shares are more valuable to a US investor and this is reflected in a price differential between the two. I wonder if we will see price dislocations as large US investors move between the two listings and/or try and arbitrage the price difference.

Historically I think the shares of Australian BHP have traded at a premium to London BHP (and not the other way round) because the Australian shares dividends come with a tax credit. It is not a withholding tax. It is 'franked' because it is paid out of profits that have already been charged Australian corporation tax. So the tax is an extra benefit to the shareholder which in some jurisdictions may be offset against other tax liabilities. One reason Elliot was pushing for this a few years ago.

OK, but the extra desirability of the Australian listed shares gave them a higher share price, which means that for smaller investors the British listed shares were better value. Larger investors tend to know how to claim back tax or utilise credits whereas small investors don't so much.

Today on the NYSE, BBL (UK listing) is up 2% whilst BHP (Australian listing) is down 8.5%. Something is going on but I don't understand it.

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Re: BHP Group (BHP)

#435456

Postby scrumpyjack » August 17th, 2021, 5:45 pm

Lootman wrote:
Today on the NYSE, BBL (UK listing) is up 2% whilst BHP (Australian listing) is down 8.5%. Something is going on but I don't understand it.


I would guess that as the UK shares are to be converted to AUS shares, the premium price of the AUS shares is no longer deserved so the value of the whole business is being re-apportioned by the market between the UK and AUS shares. Hence I would expect the AUS shares to fall relative to the UK ones.

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Re: BHP Group (BHP)

#435489

Postby Bouleversee » August 17th, 2021, 7:51 pm

I'd love to know the financial details of this deal and whether there is to be a consolidation of existing BHP holdings. This is what ADVFN said in its evening bulletin today: "In equity markets, BHP Group closed up 3.4% after agreeing to sell its petroleum business to Australia’s Woodside Petroleum, and posting a 42% jump in full-year net profit.

Russ Mould, investment director at AJ Bell, said the market was "clearly excited" about BHP’s move to sell the petroleum business.

“While investors are set to get shares in the combined venture rather than an immediate cash payout, this will give them the option of selling the shares should they choose and realising value that way,” he said."

My feeble brain is finding it difficult to see how BHP will have sold its petroleum (also gas if I understand correctly) business to Woodside if no money changes hands but the BHP shareholders get landed with shares (collectively amounting to a significant stake) in an Australian oil and gas company which they may not want. Added to the fact that the parent company is to drop its UK registration, is this a good deal for shareholders or not? My instinct, without further info, is that I would want to get rid of the Woodside shares (especially since I lost quite a bit on their shares many years ago, long before global warming became an issue) and buy more BHP but (I have 2 holdings) this would involve fees, sdrt and spread, and timing would probably be crucial as the Woodside s.p. would drop if we all had the same idea. I reckon those who sold their BHP shares at this early morning's high may have been on the right track.

It will be interesting to see what the 'experts' say tomorrow. Shareholding becomes ever more complicated and LTBH unlikely to have the most favourable outcome.

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Re: BHP Group (BHP)

#435500

Postby monabri » August 17th, 2021, 9:12 pm

Bouleversee wrote:I
My feeble brain is finding it difficult to see how BHP will have sold its petroleum (also gas if I understand correctly) business to Woodside if no money changes hands but the BHP shareholders get landed with shares (collectively amounting to a significant stake) in an Australian oil and gas company which they may not want.

It will be interesting to see what the 'experts' say tomorrow. Shareholding becomes ever more complicated and LTBH unlikely to have the most favourable outcome.


I was trying to get my head around it all earlier (HYP P board) and to get these large sums of money into context :-

viewtopic.php?p=435341#p435341]

[1] As a starting point - BHP (UK & AUS) has a market cap of £120bn. (US $165bn ).

[2] "The crude oil and condensate, gas and natural gas liquids (NGLs) produced by BHP’s petroleum assets are sold on the international spot market or domestic market. The total gross asset value of the BHP petroleum business as at 30 June 2021 was US $15.4 billion"

"The Board has determined to pay a final dividend of US$2.00 per share or US$10.1 billion"

So, the annual dividend of $3.01 ($1.01+$2.00) paid by BHP is in the same ballpark as the assets being merged. They are merging ~10% of their business by market value.


[3] BHP get 48% of the merged group - and we get to own shares in this new merged group.

[4] The Market Cap of Woodside ~20 billion Aus dollars ...£10.6bn. BHP assets of $15.4bn (see above) = £11.1bn are being put into the pot. Yet the split is in favour of Woodside?

[5] I was umming and ahhing about selling when the sp shot up 10% this morning...I could have sold and rebought with a profit! Drat!


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