19th Mar 2025 09:12
(Alliance News) - Rio Tinto PLC on Wednesday defended its dual-listing structure again, after a pair of proxy advisers backed a review into it proposed by an activist investor.
Palliser Capital has requisitioned a vote on Rio Tinto's corporate structure, believing a dual-listing has led to a USD50 billion loss of value. Rio Tinto believes that claim is "unfounded and misleading" and a unification would be "value destructive".
"The board has already conducted a robust and comprehensive review of a unification of the DLC with five leading external advisers, the conclusions of which are clear," the London and Sydney-listed miner said.
"Most recently, a unification of the DLC was reviewed over several months in 2024, with substantial input and advice from five leading external advisers - financial advisers (Goldman Sachs and J.P. Morgan) and legal advisers (Linklaters LLP and Allens). Detailed tax analysis was undertaken by leading professional services firm EY. Rio Tinto notes that half of the board was appointed less than three years ago and brings fresh perspectives, and the board benefits from directors with directly relevant capital markets and financial services expertise."
Rio said it has "engaged extensively with both Palliser Capital and a wide range of other shareholders".
The miner believes the rationale for a unification at mining sector peer BHP Group Ltd, which recently surrendered its London primary listing and therefore its FTSE 100 spot, "does not apply to Rio Tinto".
It added: "The board has already published its conclusions, and disclosure of further analysis in key commercially sensitive areas would be prejudicial to shareholders' interests. A further review of this topic would be wholly duplicative at a time of important execution against the group's strategic objectives."
If Rio Tinto were to relinquish its primary listing in London, it would no longer be eligible to be on the FTSE 100.
Institutional Shareholder Services on Wednesday joined fellow proxy advisor Glass Lewis in supporting the Palliser proposal for Rio to investigate whether it should call time on the dual-listing structure.
Noting the ISS announcement, Palliser said: "ISS notes that the BHP transaction particularly sets 'a precedent that is difficult to dismiss', evidently unconvinced by Rio Tinto's explanation in its recent letter to shareholders that 'BHP's facts and circumstances were materially different than Rio Tinto's'. In support of Palliser's position, ISS states that 'unification appears to bring several benefits, like reduced complexity and lower chance of conflict of interest, strategic flexibility and, for PLC shareholders, a closing of the valuation discount of their shares'."
Rio Tinto PLC will hold an annual general meeting in London on April 3, where shareholders will get a vote on the Palliser proposal. The Rio Tinto Ltd AGM is scheduled for May 1 in Perth.
In recent years, plumbing and heating products firm Ferguson Enterprises Inc, bookmaker Flutter Entertainment PLC, building materials supplier CRH PLC, and miner BHP have been among a rush of large companies moving their primary listings from London.
Last month, Glencore PLC said it may consider transferring its primary listing out of London if it becomes clear that another venue would be a "better one".
Speaking at a post-earnings call, Chief Executive Gary Nagle said the miner and commodity trader "ultimately" wants to ensure its shares are traded at the "right exchange".
Glencore is a FTSE 100 constituent owed to its size and primary listing in London. Should it move its primary listing away from London, it would no longer form part of the FTSE 100 and would deliver another big blow to London as a financial centre. Glencore is also listed on the Johannesburg Stock Exchange.
"If there's a better one, and those include the likes of the New York Stock Exchange, we have to consider that," Nagle said.
Rio Tinto shares were 1.0% lower at 4,857.50 pence each in London on Wednesday morning. The wider FTSE 100 was 0.3% lower.
By Eric Cunha, Alliance News news editor
Comments and questions to [email protected]
Copyright 2025 Alliance News Ltd. All Rights Reserved.
Related Shares:
Rio TintoBHP GroupGlencoreFergusonFlutter EntertainmentCRH