Activist hedge fund Palliser Capital failed in its bid to compel Rio Tinto to review a potential shift in its primary listing to Australia, as shareholders overwhelmingly rejected the proposal at the miner’s annual meeting in Perth, according to a report by the Financial Times.
Only 19% of shareholders supported Palliser’s resolution—well below the 75% threshold required to pass, and even shy of the 20% minimum needed to trigger a formal post-vote consultation under UK listing rules.
Despite the setback, Palliser’s campaign has thrust the dual-listed structure of one of the world’s largest miners into the spotlight, reigniting debate around the long-term viability of London’s appeal as a home for global natural resources firms. The vote also echoes a broader trend in hedge fund activism targeting corporate governance inefficiencies and value unlock strategies across sectors.
Palliser, led by former Elliott Management executive James Smith, has argued that Rio’s structure is outdated and value-destructive, particularly given that over 80% of the company’s earnings are generated in Australia. The hedge fund contends that a unification of Rio’s dual listings –similar to what Smith previously pushed through at BHP – could support higher share valuations and facilitate transformational M&A.
Speaking after the vote, Smith remained undeterred: “We expect to build on our work with a board that is more willing to collaborate and listen.”
The campaign had some institutional backing. Proxy advisers ISS and Glass Lewis both recommended a review of Rio’s listing structure, but major shareholders including Royal London Asset Management, Ninety One, and Ausbil opposed the resolution. “An independent review would be unnecessary and a distraction,” said George Cheveley, portfolio manager at Ninety One.
Rio, which contracted EY to study the implications of a consolidation last year, maintained that such a move would trigger significant tax liabilities and potentially result in lower share prices for Australian-listed stockholders. Chair Dominic Barton labelled the idea “value-destructive” while reiterating the company’s openness to proposals that enhance shareholder value.
Still, hedge fund observers note that Palliser’s campaign – though unsuccessful in the vote – has succeeded in elevating the issue to a board-level discussion and could mark the beginning of a longer engagement effort.
