A UK-based activist investor, Palliser Capital, has called for mining giant Rio Tinto to abandon its primary London listing and instead unify its corporate structure in Australia.
According to a report by the Financial Times, Palliser Capital, which has taken up a stake in Rio Tinto, believes the company’s dual corporate structure is a “barrier to its strategic plans, making it difficult to do major acquisitions.”
Palliser argued that the current structure, with Rio Tinto having primary listings in both London and Australia, complicates the company’s corporate governance and creates a valuation gap that makes it challenging for Rio to pursue all-stock takeovers.
The activist investor believes that by giving up its primary London listing and unifying its corporate structure in Australia, Rio Tinto would be better positioned to execute its strategic plans and pursue major acquisitions more effectively.
Rio Tinto, one of the world’s largest metals and mining companies, has maintained a dual-listed structure since the late 1990s, with primary listings in both London and Australia. This setup has enabled the company to access capital markets in both the UK and Australia.
However, Palliser Capital’s call for a structural change suggests that the activist investor sees the dual-listed structure as a hindrance to Rio Tinto’s growth and strategic flexibility. The investor believes a simplified, unified structure in Australia would better serve the company’s long-term ambitions.
The report indicates that Palliser Capital’s demands pose a potential challenge to Rio Tinto’s current corporate structure and governance, which the company may need to address as it navigates its future strategic decisions.