Billiton shareholders approve BHP merger

Billiton‘s shareholders have approved the company’s proposed US$32-billion merger with Australia’s BHP (BHP-N), according to Reuters.

Billiton says 91.5% of the votes cast were in favour of the deal. More than 50% of Billiton’s shares were represented at the vote.

The company’s shareholders had expressed opposition to some payments tied to the merger. The proposal contains a clause triggering executive payments totalling 14.2 million shares, worth about US$72 million. Originally, these payments would only be made in the event of a full takeover or after certain performance targets had been met. Brian Gilbertson, Billiton’s CEO, stands to receive 1.44 million share options, worth more than US$7.1 million.

The deal has seen more scrutiny in Australia, where BHP shareholders will vote on Friday. They have called into question the disclosure of financial information about the merger and the fact that BHP would hold only a 58% stake in the new group. Some valuations place BHP’s stake at up to 65%.

BHP shareholders are also worried that the merged company would be rooted in Britain and lose its Australian identity. Billiton and BHP have insisted that BHP-Billiton would remain headquartered in Melbourne and maintain a corporate management centre in London.

The merger would take place under a “dual-listed” structure. This means that both companies would retain their existing public listings, but combine their management teams and finances. BHP-Billiton would effectively have about 6 billion shares outstanding and a market capitalization of US$28 billion.

Under the deal, BHP shareholders would receive a bonus of 1.06 shares for every share held. This would even out the economic and voting rights between BHP and Billiton shareholders.

Also, Paul Anderson, BHP’s current CEO, would carry on in that capacity until 2002, when Brian Gilbertson would take the helm.