Activist hedge fund firm hedge fund Palliser Capital has intensified its campaign for Rio Tinto to unify its dual-listed structure, releasing a letter on Monday urging the company’s board to take decisive action, according to a report by Reuters.
The letter, addressed to Rio Tinto’s chairman, builds on the findings of an appraisal report by Grant Thornton Australia, which highlights the inefficiencies of maintaining separate UK and Australian listings. The report points to a persistent share price disparity between the two listings, which hinders Rio Tinto’s ability to execute stock-based M&A transactions and complicates equity capital raising.
Palliser, alongside over 100 shareholders, has proposed a resolution calling for a review of the dual-listed structure, to be voted on at Rio Tinto’s upcoming AGMs in London on 3 April and Perth on 1 May. The fund argues that the current structure is inefficient and value-destructive, citing the fact that Rio Tinto has not used shares as acquisition currency since adopting the dual-listed model in 1995.
The report also suggests that a unified listing could improve dividend franking capabilities, potentially enhancing returns for shareholders. Currently, Rio Tinto maintains 371.2 million shares on the Australian Stock Exchange and 1.25 billion on the London Stock Exchange.
The move echoes a similar restructuring by BHP Group (BHP.AX), which collapsed its dual-listed structure in 2022 following pressure from activist investors and private equity stakeholders. BHP now operates primarily from Australia, a model Palliser suggests Rio Tinto should strongly consider.
