South32 gets official nod of approval from BHP shareholders

South32, BHP’s non-core spin off company, finally gets an official nod from BHP Billiton shareholders on Wednesday. 98.05% of the shareholders were in favour of the spin off company that will now get a separate listed entity.

The much talked about company will handle BHP’s erstwhile assets in lead, zinc, silver, thermal coal, nickel, manganese and aluminium across Southern Africa, Australia and Columbia. The current valuation of the company is pegged at $7.6 billion based on average midcap multiples.

With the demerger complete, every Billiton shareholder will receive a new South32 share for each Billiton share they hold. The company will proceed towards UK, Australia and SA listings on May 18. The move was spurred by BHP’s need to shed off the excess weight so that they can focus on their core businesses namely iron ore, coking coal, copper and petroleum.

Analysts and experts are in debate about the future of the newfound company and whether the new shareholders will retain the South32 shares. As of now, it is too early to say how the company will evolve although CEO Graham Kerr says that the feedback from investors and analysts on their promotional road show had been positive.