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London - Global miner BHP Billiton [JSE:BIL] is considering listing a planned spin-off company in London as well as in Sydney and Johannesburg, it said in a letter to shareholders, responding to concerns of some London-based investors.
In August, BHP said it would spin off some aluminium, coal, manganese, nickel and silver assets worth an estimated $16bn into a new company that would be headquartered in Perth and listed in Australia, with a secondary listing in South Africa.
Shareholders in BHP Billiton Ltd and BHP Billiton Plc would receive shares in the new company, yet to be named, on a pro-rata basis.
Some UK-registered shareholders have expressed concerns about the lack of a London listing, however.
"Since the announcement, we have been able to engage extensively with investors and other stakeholders," BHP said in the letter to shareholders.
"Based on this, we are now assessing a potential (additional) standard listing in London for the new company."
Some funds based in Britain do not have a mandate to hold shares in companies listed abroad and would therefore have been obliged to sell shares in the new company, if it is not listed in London. This could have put immediate pressure on its share price.
"I think it's a good idea. Some UK shareholders felt like they were being treated differently to other shareholders, which they weren't happy about," Liberum analyst Richard Knights said.
"Depending on their mandate, some of them might have been forced to sell the shares immediately. So a UK listing solves their problem."
After the demerger, BHP Billiton will focus on four main pillars: iron ore, copper, coal and petroleum, with potash as a potential fifth pillar, the company has said.
