While all the fishwrappers understandably focus on BHP’s massive result, the other major international company chaired by Don Argus was also reporting a very nice profit and confirming that the dual-listed structure that both firms currently operate under is a dud.

Brambles’ results surprised on the upside with its CHEP pallet business going gang busters, showing the benefits of the company’s clean-up under CEO David Turner. So what’s the priority for the rest of the year now that the money is pouring in and millions of pallets don’t go missing?

Answer: Completing the unification of the dual-listed Australian and British companies by December, which will return Brambles to having its primary listing on the ASX with a secondary one in London.

The same arguments for undoing the Brambles dual-listing apply to BHP-Billiton and a first step could be happening with the US$3 billion shareback being concentrated on BHP-Billion Plc.

Southern Cross Equities director and Eureka Report contributor Charlie Aitken has been pushing the buy-out of the Plc operation as about the best thing BHP could do with the billions cascading into its vaults. Writes Aitken:

I read one of our competitors suggested BHP should keep the PLC listing because it allows European and North American investors the opportunity to deal in BHP shares in their own time zone. Geese, they’re rushing over themselves to widen the discount, and all the dual-listing structure attracts is hedge funds, day traders, and short-term noisemakers. My view remains that BHP should continue to buy back as much discounted PLC scrip as possible over the next few years, and eventually only have an ADR listing and a primary Australian listing. This strategy would improve the P/E by 20%.

Aitken also warns that the constant discounting of BHP in London just might make it a takeover target for one of the oil majors that also are awash with cash and could do with a diversification. Removing the Plc nonsense would solve that and as for the alleged “convenience factor” for northern hemisphere investors, when you’re as big and good as BHP, you are the better mousetrap and the world will indeed come to you. The Smage puts the Massive Australian/Pom/South African in context:

BHP’s global sharemarket value has now reached $US132 billion ($173 billion), making it the 23rd biggest company in the world. It ranks ahead of IBM, Google, Coca-Cola and Nokia and just behind Mitsubishi and Chevron.

It’s now up to chairman Don to explain to shareholders why BHP shouldn’t follow the Brambles path – or has it already started on that journey without announcing it?

Peter Fray

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Peter Fray
Editor-in-chief of Crikey