London-based hedge fund Palliser Capital has intensified its campaign to streamline global mining giant Rio Tinto’s (RIO) dual-listed structure, urging the company to move toward full unification. In a letter addressed to Rio Tinto’s chair on Monday, Palliser Capital highlighted an appraisal report concluding that the “advantages of unification outweigh the disadvantages” for both the company and its shareholders.
Rio Tinto’s Complex Dual-Listed Framework Under Scrutiny
Currently, Rio Tinto operates under a dual-listed structure, maintaining separate shareholder bases in the UK (Public Limited Company) and Australia (Limited). This setup requires the company to hold two separate annual general meetings (AGMs): one in London on April 3 and another in Perth on May 1.
At these meetings, shareholders will vote on a resolution proposed by Palliser Capital and over 100 investors, advocating for a comprehensive review of the existing structure. The fund has labeled the dual-listing model as inefficient and “value destructive.”
Rio Tinto’s listing currently consists of approximately 371.2 million shares on the Australian Securities Exchange (ASX) and 1.25 billion shares on the London Stock Exchange (LSE).
Following in BHP’s Footsteps?
This pressure on Rio Tinto follows a similar move by larger rival BHP Group (BHP), which, after facing significant activist investor scrutiny, dismantled its dual-listed structure in 2022 and consolidated its primary listing in Australia.
The upcoming shareholder votes at Rio Tinto’s AGMs will be pivotal in determining whether the company follows BHP’s precedent or retains its existing corporate framework. Investors and analysts are watching closely as the outcome could have significant implications for Rio Tinto’s market valuation and operational efficiency.
