BHP Billiton

first_img Tags: NULL whatsapp IT is the twelve billion dollar question: how do you spend your massive cash pile when every bid you make goes wrong? BHP Billiton blew $350m (£218m) of fees on its failed pursuit of Potash, having already spent some $75m on its aborted iron ore joint venture with Rio Tinto. Once bitten but twice shy, the mining giant has now decided to restart its $4.2bn share buyback programme. Some investors will be relieved that the miner walked away from the Potash deal: many were concerned that Marius Kloppers would sweeten his offer too much, kicking earnings accretion well into the future. Canada and Potash had extracted so many concessions and guarantees – on jobs, domicile, and investment – that BHP had little room for manoeuvre on cost cuts. BHP has to do something with the cash that is burning a hole in its balance sheet, but the $4.2bn buyback is comparatively small beer: at the end of June, BHP had a cash pile of $12.5bn. Analysts expect further buybacks in the future, but we hope this isn’t a long-term strategy. Buying back shares or debt suggests that management has lost its appetite for big deals – which add more value in the long run – or at least that acquisitions have been put on the backburner. Here’s hoping it’s the latter. Monday 15 November 2010 8:49 pm KCS-content BHP Billiton whatsapp Show Comments ▼ Read This NextRicky Schroder Calls Foo Fighters’ Dave Grohl ‘Ignorant Punk’ forThe WrapCNN’s Brian Stelter Draws Criticism for Asking Jen Psaki: ‘What Does theThe WrapDid Donald Trump Wear His Pants Backwards? Kriss Kross Memes Have AlreadyThe WrapHarvey Weinstein to Be Extradited to California to Face Sexual AssaultThe WrapPink Floyd’s Roger Waters Denies Zuckerberg’s Request to Use Song in Ad:The Wrap’The View’: Meghan McCain Calls VP Kamala Harris a ‘Moron’ for BorderThe Wrap’Sex and the City’ Sequel Series at HBO Max Adds 4 More ReturningThe WrapNewsmax Rejected Matt Gaetz When Congressman ‘Reached Out’ for a JobThe Wrap2 HFPA Members Resign Citing a Culture of ‘Corruption and Verbal Abuse’The Wrap Sharelast_img