Rio Tinto shareholders reject move to ditch primary London listing
Rio Tinto will keep its primary London listing after the mining giant’s shareholders voted comprehensively to reject an activist investor’s push for the firm to abandon its current dual-listed structure.
More than eight in 10 shareholders voted against the motion proposed by London-based Palliser Capital, which called for a review into whether the miner should consolidate its listing in Sydney.
The result, which was published by Rio Tinto on Thursday, represents a convincing rebuke of the hedge fund’s motion and puts to bed fears the company could mirror rival miners and depart from London. Under London Stock Exchange rules, Palliser needed to corral three-quarters of Rio Tinto backers into supporting its motion to compel the commodities juggernaut to adopt the resolution formally.
It was also just shy of the one-fifth threshold required to trigger an informal ‘consultation’ under the same rules.
“Rio Tinto will continue to engage with our shareholders and will carefully consider the feedback provided,” the company said in a statement.
Palliser, a boutique activist asset manager whose assets under management is understood to be roughly $1bn (£750m) under management, had previously argued that Rio Tinto’s decision to stick with its London listing had cost shareholders $28bn of value.
In an excoriating letter to the miner’s board in December, the fund house branded the dual structure an “unmitigated failure”, arguing it had obstructed acquisitions and caused shares to trade at a material discount to Australian peers.
Rio Tinto’s management sternly repudiated investor’s claims, which it said were “unfounded and misleading” in a statement in March. Unification would cost shareholders billions of dollars in tax, the board said, and would push down the share valuations in its Australian listing.
Palliser’s motion had sparked fears that Rio Tinto would become the latest of several mining giants to reassess its ownership structure away from London public markets, which have long been a bastion of the world’s largest miners.
In 2022, Rio Tinto’s Australian mining rival BHP left the FTSE 100 to pursue a unified listing structure in Sydney after a similar campaign to Palliser’s by activist investor Elliott Management.
More recently, commodities giant Glencore said it is reviewing its own status on the London Stock Exchange, with New York the most likely destination for the Anglo-Swiss multinational.
Anglo American was also forced to bat away an unsolicited offer from BHP for a £38.6bn megamerger last year.
Rio Tinto shareholders’ made their decision to reject a similar path to those of BHP and Glencore at its annual meeting in Perth on Thursday. Palliser’s chief investment officer, James Smith, gave a lengthy presentation at the annual gathering, in which he argued that “Australian profit” was being used to “pay UK dividends”.
Under Smith’s unsuccessful proposal, Rio’s shares would have still been traded in London via a secondary listing, but its entire corporate structure – and its primary listing – would have shifted to Sydney.