According to a report in the Financial Times, a UK-based activist investor has called for mining giant Rio Tinto to abandon its London listing and unify its corporate structure in Australia instead.
The activist investor, Palliser Capital, has taken up a stake in Rio Tinto and argued that the company’s dual corporate structure is a “barrier to its strategic plans, which made it difficult to do major acquisitions.”
Palliser claimed that Rio Tinto’s current structure, with listings in both London and Australia, makes it difficult for the company to pursue all-stock takeovers due to the valuation gap and complicated corporate governance.
The activist investor has urged Rio Tinto to give up its London listing and consolidate its operations in Australia, where it has its primary listing.
Rio Tinto currently maintains a dual-listed structure, with primary listings on the London Stock Exchange and the Australian Securities Exchange. This structure has been in place since the company’s merger in 1995 between the former Rio Tinto plc and the former CRA Limited.
The report suggests that Palliser Capital believes a unified corporate structure in Australia would better position Rio Tinto to execute its strategic plans and pursue potential acquisitions more effectively.
Rio Tinto has not yet responded to the activist investor’s demands. The company’s dual-listed structure has been a longstanding feature of its corporate governance, and any changes would likely require significant consideration and approval from shareholders and regulators.