BHP hires Barclays to divest U.S. shale gas assets: sources

Tue May 23, 2017 7:19am EDT
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By Clara Denina

LONDON (Reuters) - BHP (BHP.AX: Quote) (BLT.L: Quote) has hired Barclays (BARC.L: Quote) to divest its U.S. Fayetteville shale gas assets as the miner seeks to fend off an attack by activist funds, two sources close to the matter said on Tuesday.

BHP said last month the gas-rich Fayetteville field in Arkansas was under review and that it was "considering all options, including divestment".

BHP declined to comment and Barclays was not immediately available for a comment.

The miner had tried to sell the business more than two years ago, but the attempt was shelved in February 2015, when it said it planned to "maximize value" of the assets.

The revived sale comes as activist investor Elliott Advisors, which has built up a 4.1 percent stake in BHP's London-listed arm, urged for changes to boost shareholder value.

The sale is expected to draw interest from smaller mining companies already operating in the region, the sources said.

The Fayetteville assets, which BHP acquired for $4.75 billion in 2011, had a book value of $919 million at the end of 2016, according to the company's annual accounts.

The miner had to write down the assets by $2.8 billion in 2012 due to lower gas prices.   Continued...

FILE PHOTO: Australian mining company BHP's new corporate logo, released to Reuters from their Melbourne, Australia, headquarters May 15, 2017. BHP/Handout via REUTERS/File Photo