The Terms Of The BHP Billiton Spinoff Of South32

I’ve been conversing with the investor relations department at BHP Billiton trying to figure out the terms of the South32 spinoff of BHP Billiton for American shareholders that own American Depository Shares (ADSs). As an aside, the name South32 is because BHP Billiton will be spinning off assets that are located in both Australia and South Africa, and they both share the geographic 32nd South parallel line of latitude.

Although the regular shares that trade in Britain will be spun off with a 1:1 ratio, each owner of an ADS share in BHP Billiton will receive 0.4 shares of South 32. If you own, say, 100 shares of BBL and the demerger gets approved, you will have 100 shares of BHP Billiton paying you $248 in immediate annual dividend income (because the management indicated that the dividend won’t be debased to a lower amount to reflect the South32 spinoff) … Read the rest of this article!