BHP backflip after $7bn backed our tilt

February 2, 2010

Dear Mayne Reporters,

We've had some big wins in our time but it's hard to think of one that compares with BHP Billiton's humiliating abandonment of its empire building $150 billion takeover bid for rival Rio Tinto.

Today I can reveal that more than $7 billion worth of proxies backed my BHP board tilt, which was on the specific platform that BHP Billiton abandon the Rio assault and find a new chairman to replace Don Argus.

The whole point of the tilt was to give BHP Billiton shareholders a voting mechanism to register their opposition, which they did in droves.

The proxies which were flashed up on the screen at the London AGM last month showed that 252 million shares or 17% of the votes supported my candidacy - the biggest dollar backing in 31 public company tilts and the second biggest percentage vote since 2002. Check out the complete electoral record here.

Click here to see the letter from BHP Billiton company secretary Jane McAloon, plus the proxy slide displayed in London, which hasn't been reported anywhere or even released to the ASX.

Boardroom accountability at BHP and Rio

Rio Tinto shares plunged 36.73% in London trade last night, whilst BHP soared 7.24%, which reflects the ridiculous 35% premium that BHP Billiton was offering to buy its debt-ridden rival.

With the takeover bid abandoned, the focus now shifts to boardroom accountability at both companies, as was explained during this interview with Steve Chase on ABC News Radio at 7.15am today.

Rio Tinto chairman Paul Skinner has already flagged his departure and it is very hard to see how CEO Tom Albanese can survive given the folly of paying $US43 billion to buy Alcan - a business that today would be valued by the market at about $US10 billion.

There also needs to be some accountability at BHP Billiton, which has blown a staggering $450 million pursuing a flawed takeover strategy. At least shareholders have saved themselves the $6 billion in costs if the deal had proceeded, in what amounted to the last great free lunch for the global investment banking community

At this point, it is worth remember the uncensored platform that I submitted to BHP:

Mr Mayne believes BHP-Billiton is embarking on an ill-considered empire-building frolic with this putative Rio Tinto takeover. He is standing for election to give shareholders a vehicle through which to register their opposition to this proposal. Mr Mayne contends the Rio Tinto merger could be highly dilutive for BHP-Billiton shareholders, similar to what happened with BHP's 2001 merger with Billiton. In that case, 42% of BHP was exchanged for Billiton's assets which have proved to be patently inferior to the booming coal, iron-ore and petroleum operations held by BHP at the time. He also feels the exhaustive and complex Rio Tinto takeover process is an unnecessary distraction for management which should be focusing on capitalising on this once-in-a-generation resources boom.

Mr Mayne also believes it is time for BHP-Billiton chairman Don Argus to retire, rather than attempt one of the world's biggest takeovers to finish off his career. Mr Argus has been a director of BHP since 1996 and chairman since 1999. He is a 70 years old. Time's up! Please vote for Mr Mayne to send the board a strong protest message on the Rio Tinto takeover strategy and the need for generational change at the top.

Surely the debate must now move to the question of whether it is appropriate for Don Argus to seek another three year term at tomorrow's BHP Billiton AGM. Check out this video to be reminded about his woeful record over the years. BHP's institutional shareholders should revoke their proxies cast in favour of Argus and turn up tomorrow to vote against his re-election on the floor of the meeting. Sadly, it seems the proxy advisers have all recommended in favour of Argus. They should be issuing updated reports calling for some board room accountability.

Woolies heavies meet Paul Bendat as Sky Racing bans anti-pokies TV ad

Full marks to Australia's biggest pokies operator, Woolworths, for rolling out the heavies to meet the man behind, Paul Bendat, at The Langham Hotel in Melbourne yesterday.

Finance director Tom Pockett, company secretary Peter Horton, external auditor Rod Smith, PR boss Andrew Hall and Bruce Mathieson's long-serving deputy Ross Blair-Holt were all there to learn about the concerns of this very unusual anti-pokies campaigner who spent a career in business and whose father is BRW Rich Lister Jack Bendat.

Indeed, Bendat will appear at a press conference with anti-pokies campaigner Nick Xenophon in Federal Parliament at 10am this morning after Sky Channel refused to broadcast this TV ad that Paul developed, which is wrapped up in this latest Mayne Report video.

Check out Senator Xenophon's press release from last night ahead of today's press conference with Bendat.

A huge couple of days

The logistics tomorrow are going to be very tricky.

I'm running for the Centro Retail board and have actually been endorsed for the first time by powerful proxy advisor Risk Metrics. The AGM starts at 10am and chairman Paul Cooper rang yesterday to say that he'd be voting open proxies in favour of my nomination.

Unfortunately, I won't be able to stick around for too long because the BHP Billiton AGM starts at 10.30am at Melbourne Park and then there is also a pokies-related appearance planned for the Woolworths AGM which starts at 11am.

The busiest AGM season in a decade then finishes on Friday, the same day that voting closes in the Manningham Council election, which is looking promising. Check out the council campaign details here.

We'll keep you posted on all this frenetic activity as it unfolds.

That's all for now.

Do ya best, Stephen Mayne

* The Mayne Report is a multi-media governance website published by Stephen Mayne with occasional email editions. To unsubscribe from the emails click here.