This week marked the ASX debut of South32, the third major group of BHP assets (total value $14 billion) to be spun-off to its shareholders in the last 15 years. In its first week of trading, South32 has performed well (outperforming BHP by 11% adjusting for the split). Whilst this confounded predictions of weakness, we note that most of the gains occurred on Tuesday’s session and pricing may be tested next week on the back of index-related selling from European investors. In this week’s piece we are going to look at the rationale behind spinning out assets to form a new company, together with the other two spin-offs previously completed by BHP.
Read more here.