Palliser Capital has reiterated its demand for Rio Tinto to drop its primary London listing, citing that the mining giant’s dual London-Sydney listing arrangement has led to a $50bn (£39.4bn) loss for shareholders.
According to a letter to the board seen by the Financial Times, Palliser Capital branded the current structure an “unmitigated failure”, claiming it prevents acquisitions and results in Rio Tinto’s shares being undervalued compared to Australian counterparts, as reported by City AM.
The UK hedge fund insists on an independent review, pointing to BHP, which shifted exclusively to an Australian listing in 2021.
Blackwattle Investment Partners, an Australian investor, concurred with Palliser’s sentiments, noting that Rio’s shares are suffering a widening valuation gap, now 19 per cent, as opposed to the 15 per cent reported in May.
Despite owning only about one percent of Rio’s shares—a stake making it one of their most substantial investments—Palliser first made its case for abandoning London in May. .
Ahead of Rio Tinto’s London investor seminar, Rio maintains such a listing consolidation could come at an expense in the “mid-single digit billions of dollars” range and potentially erode value. Nonetheless, in anticipation of the event, Rio Tinto expressed ambitions to sustain growth until 2033 with an annual growth rate target of approximately three per cent.
“We have all the building blocks we need to become a global leader in energy transition materials, and we have a clear plan for a decade of profitable growth,” stated Jakob Stausholm, the Chief Executive.
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