Stephen Bartholomeusz: What BHP’s big move home means for the Australian sharemarket
BHP’s 20-year experiment with a sophisticated but unwieldy corporate structure will end this week. Its demise has implications, not just for BHP and its shareholders here and in the UK, but the wider Australian sharemarket.to dissolve the dual-listed entity structure constructed in 2001 for the Big Australian’s merger with Billiton.
For a time tax issues – a Singaporean marketing joint venture and a vast hoard of tax losses within a coal mine in NSW -- argued against changes to the structure. For most of the two decades since the formation of the dual-listed structure the Plc shares have traded at a material discount to Ltd’s, generally in the mid-teens although it has been as much as 20 per cent.
What was a Plc discount of 21 per cent immediately ahead of the unification announcement has been closed to less than three per cent as arbitrageurs sold BHP shares short and bought Plc shares that they will use to cover their positions, at tidy profits, once the unification is complete.
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