Analysts at Berenberg took a fresh look at mining giant BHP on Tuesday after an announcement that the firm had received all regulatory and competition approvals with respect to its proposed corporate structure unification.
Berenberg stated that with these approvals received, shareholder votes for BHP’s Ltd and Plc lines would take place as planned on 20 January, with the key focus being the requirement to pass the special resolutions and the Plc UK scheme of arrangement with a 75% majority of votes cast.
The German bank said this was in line with expectations and guidance by the company, with unification expected in the first quarter of 2022.
Berenberg said the key risk to the restructuring was the failure to reach a 75% approval, with guidance by proxy voting advisors being key. It also noted it was yet to see any headlines on proxy voting advisors like ISS and Glass Lewis’ recommendations, but any suggestions of a vote against unification were likely to push out BHP’s Ltd/Plc differential.
“We remain Hold-rated on BHP but expect the unification (if successful) and resultant index flow (as BHP down-weights from the FTSE and up-weights on the ASX) to create net buying for the shares, which, alongside higher iron ore prices, should be supportive for the share price,” said the analysts.