Activist investor Palliser Capital, along with more than 100 other shareholders, has called for a resolution to review Rio Tinto’s dual-listed structure, aiming to unify the miner’s corporate framework, according to a report by Reuters.
Earlier this month, Palliser urged Rio Tinto to abandon its primary London listing and consolidate its corporate structure in Australia, arguing that the current dual-listed model has already cost shareholders around $50bn in lost value.
On Thursday, Palliser reportedly informed Rio Tinto’s board of its intention to present the resolution at the company’s upcoming annual general meeting on 16 January. The resolution seeks to provide shareholders with independent information and evaluate the existing ownership structure, assessing whether it is more advantageous to keep the current model or unify the company.
Palliser’s initial push to consolidate Rio Tinto’s dual-listed setup received backing from stakeholders, analysts, and investors in both Australia and the UK.
Citing an earlier letter, the report says Palliser questioned the need for maintaining the UK-listed entity, Rio Tinto, and its structural hierarchy. The letter raised concerns about the entity’s inability to independently support dividends, its minimal workforce in the UK, its limited contribution to the group’s EBITDA, and the significant trading discount compared to the Australian-listed Rio Tinto.
“In our view, it is, in fact, incumbent on management to now fully and transparently justify to the investor community exactly why Rio Tinto is immune from all of the globally-accepted inefficiencies of a DLC (dual listed company) structure,” Palliser Capital said.
