BHP Billiton Limited (ASX:BHP) receives US$9 billion bids for its shale assets

The BHP Billiton Limited (ASX: BHP) share price will be one to watch on Wednesday.

This morning reports emerged stating that BHP has received first round bids for the U.S. shale portfolio it is looking to offload.

According to Bloomberg, bids have been received from oil giants including BP, Chevron, and Royal Dutch Shell in partnership with private equity firm Blackstone. The latter pair are believed to have submitted a bid for the entire shale unit at the end of last month.

The report indicates that the first round of bidding values the assets in the range of US$7 billion and US$9 billion.

Though sources told the news outlet that BHP expects to receive offers of US$10 billion or more in the second round and up to US$13 billion if it sells the assets individually. Second round bidding is expected to occur in July, with a sole buyer the preferred option.

What now?

It will be interesting to see how the market reacts to this news. In April analysts at Citi upgraded BHP Billiton’s shares partly due to the potential sale of its US onshore assets.

At the time the broker estimated that the assets could be valued up to US$14 billion. If this report is accurate, the sale is likely to fall short of Citi’s expectations.

But, one thing that is for sure, is that BHP won’t let them go cheaply. It has previously stated that it is prepared to carry out an IPO or de-merger if necessary.

Should you invest?

I think that BHP is arguably the best resources share to buy on the Australian share market if the global economy continues its solid growth.

Trade wars are a risk that must be taken into account, but I’m optimistic that a crisis will be averted.

As such, I continue to believe it is a great option for investors wanting exposure to the sector alongside the likes of Rio Tinto Limited (ASX: RIO) and Western Areas Ltd (ASX: WSA).

But if resources shares are not for you, then these top blue chip shares might be more to your liking. I think they have market-beating potential.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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