Investing
Rio Tinto shareholders call for resolution on review of dual-listed structure
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(Reuters) -Activist investor Palliser Capital and over 100 other shareholders on Thursday sought a resolution over a review of Rio Tinto’s dual-listed model, in a bid to unify the miner’s corporate structure.
(Reuters) -Activist investor Palliser Capital and over 100 other shareholders on Thursday sought a resolution over a review of Rio Tinto’s dual-listed model, in a bid to unify the miner’s corporate structure.
Earlier this month, UK-based Palliser pushed Rio Tinto to abandon its primary London listing and unify its corporate structure in Australia, saying about $50 billion in shareholder value has already been lost due to the current dual-listed setup.
On Thursday, Palliser informed Rio Tinto’s board that the proposed resolution, which will be submitted at the miner’s next Annual General Meeting on Jan. 16, aims to give shareholders access to independent information and evaluate the current ownership structure.
The resolution seeks to determine whether maintaining the current structure is preferable to unifying the company, the hedge fund said.
Palliser’s initial proposal to unify Rio Tinto’s dual-listed structure garnered widespread support from stakeholders, analysts, and investors across Australia and the UK, the hedge fund said.
Earlier in December, in a letter, Palliser questioned the rationale for maintaining the UK-listed entity Rio Tinto Plc’s structural hierarchy.
The letter highlighted several concerns, including the entity’s inability to support dividends independently, minimal UK-based employees, and its limited contribution to the group’s EBITDA (earnings before interest, taxes, depreciation, and amortization), as well as its significant trading discount compared to the Australian-listed entity, Rio Tinto Ltd.
“In our view, it is, in fact, incumbent on management to now fully and transparently justify to the investor community exactly why Rio Tinto is immune from all of the globally-accepted inefficiencies of a DLC (dual listed company) structure,” Palliser Capital said.
Rio Tinto, the world’s biggest iron ore producer, did not immediately respond to a Reuters request for comment.
(Reporting by Roushni Nair in Bengaluru; Editing by Sonia Cheema and Eileen Soreng)
A dual-listed company is a corporate structure where a company is listed on two different stock exchanges, allowing it to access capital from multiple markets.
Shareholder value refers to the financial worth that shareholders gain from owning shares in a company, typically measured by stock price appreciation and dividends.
EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a measure of a company's overall financial performance.
A hedge fund is an investment fund that pools capital from accredited investors and invests in a variety of assets, often using complex strategies to achieve high returns.
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