Both of these things have tended to push share prices higher, reduced the cost of funding, and also given the company a bigger pool of investors to approach when looking to raise new money.
As capital markets have globalised, the benefits of dual listings have reduced. Investors are no longer as focused on their home market, and far more willing to look into international alternatives — that makes simple cross-listing more attractive. There are costs associated with maintaining two separate corporate entities too. Those include extra legal and administrative costs, but also added complexity when it comes to completing major corporate actions.
For example, BHP is currently looking to demerge its petroleum assets, and doing so from one unified corporate entity is far easier than across two. That share will be listed on the London Stock Exchange, and shareholders will have the opportunity to opt for sterling dividends. The net effect will be pretty minimal for most direct shareholders — although of course they will benefit from the greater flexibility, and slightly lower costs that are the driving reason for the acquisition.
Remember all investments can fall as well as rise in value, so investors could get back less than they invest.
However, it might be more of a problem for passive fund managers and investors who could be losing a considerable portion of their dividend yield. Read our latest research note on BHP Group. Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by Refinitiv.
These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Investments rise and fall in value so investors could make a loss. This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment.
This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication.
Non-independent research is not subject to FCA rules prohibiting dealing ahead of research, however HL has put controls in place including dealing restrictions, physical and information barriers to manage potential conflicts of interest presented by such dealing.
See a sample. Please update your payment details to keep enjoying your Irish Times subscription. Neil Hume. Structure Mr Henry said that now was the right time to move to a simpler corporate structure that would allow the company to grow. Topics: BHP Billiton. Home energy upgrades are now more important than ever.
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