Activist investor Palliser Capital has intensified its campaign for mining giant Rio Tinto to unify its dual-listed structure in London and Sydney, advocating for the establishment of a single holding company based in Australia, according to a report by Alternatives Watch.
In a letter addressed to Rio Tinto’s board on Wednesday, the UK-based hedge fund described the dual-listed company (DLC) framework as an “unmitigated failure for shareholders” and called for an independent review to assess the feasibility and benefits of unification.
Palliser argues that the current structure hampers shareholder value, stating: “Our extensive analysis indicates that unifying the structure into an Australian-domiciled holding company could deliver a near-term upside of $28 billion (27%) for PLC shareholders, with further gains for the combined group in the medium term.”
The hedge fund, which holds a significant stake in Rio Tinto, considers this reform an “urgent” necessity to address inefficiencies and unlock value trapped in the outdated system.
Rio Tinto’s Chief Executive, Jakob Stausholm, has previously dismissed the idea of unification. In July, he cited the company’s internal review, which concluded that merging the dual structure would erode shareholder value.
Stausholm also highlighted key differences between Rio Tinto and BHP, the world’s largest miner by market value, which successfully unified its corporate structure in Australia in 2022. He argued that while BHP’s shares were predominantly held in Australia, the majority of Rio Tinto’s shares are owned by investors in London, making the comparison less relevant.
Palliser holds BHP’s unification as a model, noting the operational and shareholder benefits achieved since its transition. It claims Rio Tinto would similarly benefit, addressing inefficiencies related to franking credits — tax advantages in Australia — and improving its ability to execute stock-based mergers and acquisitions.
Rio Tinto, however, has pushed back on these points, with Stausholm previously stating that the current structure does not hinder the company’s capacity for strategic deals.
