A brief summary of the news
GLG Partners LP and the BHP are partners in business. However, in October 1, 2017, GLG Partners LP opted to sell 47 percent of its shares as disclosed by the SEC (Sawyer 2017, 1). After selling 280,953 shares, GLG Partner remained with 306,233 shares in the mining company. Its initial holdings were worth $9,420,000. The company opted to trim its share holdings. Despite the trimming of the shares, other companies opted to modify their holdings. For example, Mason Capital Management purchased new shares of BHP Billiton worth $46,601,000, while Morgan Stanley added its stake in the company by 33.9 percent. Currently, the company owns 2,496,519 shares valued at $77,767,000 following its acquisition of 631,725 shares (Sawyer 2017, 1). Similarly, Bank of America Corp increased its stake at BHP Billiton by 53.3 percent thus making its total shares to be 1,603,372 valued at $49,944,000. Marshall Wace North America also added its stake in the company thus making its shares to be $12,427,000 (Sawyer 2017, 1). The institutional investors are the leading owners of the company.
Based on the company’s current performance, it has gained growth portfolio and benefit from the growing demands of its products. After years of poor performance, the company has started to reap the benefits of an expanded portfolio and geographies. It has regained its regional market position. The company has focused on improving its cash flow, especially when it opted to use the net proceeds from the sales of the off non-core assets to settle $98 billion liabilities. This year, the company has reported a tripped cash flow of $12.6 billion compared to the 2016 cash flow of $3.4 billion (Pearce 2017, 1). Because of this improvement, the company has paid out $4.4 billion in dividends to shareholders and repurchase of stock. Previously, the company struggled to pay dividends as it could only afford $1.6 billion to cater for the dividends.
The new item is relevant to the research topic- corporate strategy because the changes, which the company has undertaken recently, have transformed its operations. Despite the GLG Partners’ move to sell its shares, many institutions streamed to purchase the shares. In fact, the institutional investors were increasing their stake (Sawyer 2017, 1). The Anglo-Australian miner opted to uphold its corporate strategy by selling off its interest to cut costs (Reuters 2017, 1).
The dual corporate strategy has ensured the company improves its performance beyond the borders. The strategy has seen the firm operate low-cost, upstream, large, and expandable assets diversity (Letts and Janda 2017, 1). Nonetheless, the firm boasts of a diverse and simple portfolio as it values the low-cost options to enhance value creation and future growth. The company seems to perform well in the NYSE market thus attracting institutional investors (Sawyer 2017, 1). The firm has used the strategy to apply its culture, values, and deploy new technologies thus exert capital discipline. It also embraces the best operating model thus leveraging its expertise thus connects across the firm and share the best practices among the multifunctional teams. Indeed, the company has demonstrated an intention of growing. The continued partnership with different institutions has increased its performance. This follows the adoption of a strategy that is consistent with its plan and value (PHP 2017, 1). The company has also adopted a new capital management framework to help in maximizing the potential values.
The move by GLG Partners to sell part of its shares in BHP and continued efforts by other leading institutions to opt to purchase new shares and increase their stakes in the company demonstrates the stable state of the company (Sawyer 2017, 1). Indisputably, it is evident that every investor would invest in a stable business. Given the rate of many institutions opting to increase their stakes in BHP, the future looks certain. It justifies the recent financial performance of the company (PHP 2017, 1). In fact, the ability of the company to pay its shareholders over $4.4 billion is a true testimony of the company’s growth. The restructuring of the organization has restored hope to the investors. The strategic information from the event revolves around the operations of the company (BHP Consulting 2017, 1).
This event has affirmed the PHP’s strategy to maximize the shareholder value in the shortest time possible. It pursues the growth strategies based on the shareholder aspirations. In most cases, companies collaborate with businesses, which offer them value for money. Given the recent dividend paid, BHP has a future (BHP Consulting 2017, 1).
Based on the success the company has reported, it is evident that PHP will be a force to reckon in the international market. Currently, it is pursuing a strategy that will see it sell all its oil assets in the United States. The will strengthen its financial position. For instance, it will no longer be vulnerable to the American economic crises (Zacks Equity Research 2016, 1). In the future, the company will have to strengthen its corporate governance structure to accommodate the growing interests of its institutional investors. The strategy will also allow the company to generate high profits and production. This will support its progressive dividend policy.
The news can be used to understand the market position of BHP because it is attracting new investors beyond the reproach. The company’s current stock report is encouraging because its shares are outstanding in the market and stood at 74,169,000, as issued by the American Depository Shares (Nasdaq 2017, 1). The key financial ratios are also positive thus justifying the strength of the company’s income and balance sheet.
BHP Consulting. "Strategy." 2017. https://bhp-consulting.co.uk/consulting/strategy/ (accessed October 6, 2017).
Letts, Stephen, and Michael Janda. "BHP profit surges on commodity rebound." ABC News. August 22, 2017. https://www.abc.net.au/news/2017-08-22/bhp-profit-surges-on-commodity-rebound/8829918 (accessed October 12, 2017).
Nasdaq. "BHP Billiton Limited Stock Report." October 6, 2017. https://www.nasdaq.com/symbol/bhp/stock-report (accessed October 7, 2017).
Pearce, James. “BHP Billiton: Australia Turnaround.” Money Show. 2 October 2017. https://www.moneyshow.com/articles/guru-47036/bhp-billiton-australian-turnaround/ (accessed October 7, 2017).
PHP. "Structure and strategy." 2017. https://www.bhp.com/our-approach/our-company/strategy (accessed October 7, 2017).
Reuters. "BHP Billiton reasserts corporate strategy." SABC. April 12, 2017. https://www.channelafrica.co.za/sabc/home/channelafrica/economy/details?id=b77d5523-3f04-4996-bac4-52a983a45929&title=BHP%20Billiton%20reasserts%20corporate%20strategy (accessed October 7, 2017).
Sawyer, Anthony. "BHP Billiton PLC (BBL) Shares Sold by GLG Partners LP." Week Herald. October 1, 2017. https://weekherald.com/2017/10/01/bhp-billiton-plc-bbl-shares-sold-by-glg-partners-lp.html (accessed October 11, 2017).
Zacks Equity Research. "BHP Billiton’s (PHP) new business strategy to drive growth." Nasdaq. June 3, 2016. https://www.nasdaq.com/article/-bhp-billitons-bhp-new-business-strategy-to-drive-growth-cm630262 (accessed October 6, 2017).