Tuesday, October 26, 2010

Major Shareholder Wants BHP (NYSE:BHP) to Buyback Shares

The largest shareholder in BHP Billiton (NYSE:BHP), BlackRock World Mining Fund manager Evy Hambro, has called for the diversified miner to begin a buyback of stock to return capital to shareholders.

Hambro said, "There is room in their balance sheet for them to be able to do it. I also think there is nothing wrong in taking advantage of the share price today, assuming they are allowed to do it legally, while this Potash (NYSE:POT) bid is ongoing."

BHP has already missed an opportunity be waiting so long, according to Hambro, and they need to get in underway as soon as possible if allowed to at this time.

Hambro said BHP should consider combining a buyback and divident, stretching it out over a period of years.

He concluded, "A one-off buyback, you don't get a good PE (price to earnings) multiple for that. If everyone knows you're going to buy back a certain amount of shares every year and you do it, people start to factor that into their long-term valuations."

Blackrock owns a 10 percent stake in BHP.

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