Rio Tinto Faces Shareholder Vote on Dual-Listed Structure

Rio Tinto announced on Thursday that a substantial portion, specifically 19.35%, of its shareholders, had cast their votes in favor of a review concerning the company’s dual-listed structure.

According to regulations in the UK, should a vote reach or exceed 20%, the company would be obligated to engage in broader consultations with its shareholders.

Palliser Capital, an activist investment firm, has been actively advocating for Rio Tinto, which maintains listings in both London and Sydney, to consolidate these listings into a single holding entity based in Australia.

Palliser contends that the elimination of the existing structure could potentially unlock an estimated $28 billion in value for those holding Rio Tinto’s London-listed shares.

Shareholders based in Britain within the world’s foremost iron ore mining enterprise participated in voting at the company’s London AGM held on April 3.

The London listing represents approximately 77% of Rio Tinto’s investor base. However, the shares listed in Australia are currently being traded at a premium of around 25%, attributable, in part, to tax benefits accessible to Australian shareholders.

Rio Tinto’s board had uniformly advised against the resolution, highlighting tax-related factors and stating that a unified listing was not essential to ensure strategic flexibility.

Palliser’s proposal garnered support from prominent proxy advisory firms such as Institutional Shareholder Services (ISS) and Glass Lewis, along with backing from over 100 additional shareholders, including Norges Bank Investment Management, Norway’s sovereign wealth fund.

A similar dual-listed arrangement was terminated by rival BHP in 2022, which now has its primary listing in Australia. This decision came six years after activist investor Elliott initiated its campaign advocating for a single listing.