The board of Rio Tinto $RIO (-2.04%)
$RIO (-2.64%) has unanimously recommended that shareholders vote against a resolution proposed by an activist investor calling for an independent review of the company's dual listing.
Palliser Capital, a London-based hedge fund, has called on the Anglo-Australian mining giant to consolidate its corporate structure into a single Australian company, arguing the current dual listing in London and Sydney diminishes value for shareholders.
Ahead of the AGMs scheduled for April 3, 2025 and May 1, 2025, Rio Tinto has issued a statement to all shareholders responding to the resolution tabled by Palliser Capital and other shareholders, as well as the related reports from Glass Lewis and ISS.
Leading international proxy advisory firm Glass Lewis and ISS recommended that Rio Tinto shareholders vote in favor of Palliser's proposal in order to conduct a proper review of the unification of Rio Tinto's dual listed company structure.
In the meantime, Rio Tinto explained that the rationale for unifying the structures of dual listed companies at other companies, such as BHP, is not applicable to its own situation. This is due to several factors, including the location, growth prospects and tax profile of the group's assets, as well as the size of the entity that would need to be absorbed in a potential dual-listed company unification.
In the Notice of Annual General Meeting 2025, Palliser Capital has proposed a resolution calling on Rio Tinto plc to establish a committee of independent directors, including an external shareholder representative. This committee will consider whether the combination of the two listed companies into one Australian-based holding company is in the best interests of shareholders. The resolution also calls for the committee to commission an independent report on this issue and publish a comprehensive report on its findings.
Rio Tinto has rejected Palliser Capital's claims of an alleged $50 billion loss in value due to the structure of the dual listed companies as unfounded and misleading. The company further argued that the combination of the two listed companies would be value destroying for the Group and its shareholders.