Rio Tinto Board Recommends Rejection Of Activist Investor's Proposal To Review Dual-Listed Structure

(RTTNews) - Rio Tinto's (RTPPF.PK, RIO.L, RIO, RTNTF.PK) board has unanimously recommended that shareholders vote against a resolution proposed by an activist investor seeking an independent review of the company's dual-listed structure.

Palliser Capital, a London-based hedge fund, has called on the Anglo-Australian mining giant to consolidate its corporate structure into a single Australian-domiciled entity, claiming that the current dual listing in London and Sydney diminishes shareholder value.

Ahead of the AGMs scheduled for 3 April 2025 and 1 May 2025, Rio Tinto issued a statement to all shareholders addressing the resolution put forth 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 Rio Tinto's shareholders vote for Palliser's resolution to conduct a proper examination into the unification of Rio Tinto's the dual-listed companies structure.

Meanwhile, Rio Tinto stated that the rationale behind unifying dual-listed companies structures 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 any potential dual-listed companies unification.

In the 2025 AGM Notice of Meeting, Palliser Capital has proposed a resolution instructing Rio Tinto plc to establish a committee of independent directors, with an external shareholder representative present. This committee would evaluate whether unifying the dual-listed companies structure into an Australian-domiciled holding company aligns with shareholders' best interests. The resolution also calls for the committee to commission an independent expert report on the matter and release a comprehensive account of its findings.

Rio Tinto has refuted Palliser Capital's claims of an alleged US$50 billion value loss due to the dual-listed companies structure, describing them as unfounded and misleading. The company further argued that unifying the dual-listed companies would be value-destructive for the Group and its shareholders.