Rio Tinto Fends Off Activist Push to End Dual Listing Structure

Rio Tinto

Shareholders reject Palliser Capital’s call for structural overhaul, but pressure remains

Rio Tinto has successfully repelled an activist investor effort to force a formal review of its dual listing structure, as shareholders voted against the resolution at its latest meeting. Despite falling short of the 75% supermajority needed, nearly 20% of shareholders supported the motion, signaling persistent unrest among some investors.

The proposal, led by London-based hedge fund Palliser Capital, argued that Rio’s dual-listed setup — split between the London Stock Exchange (LSE) and Australian Securities Exchange (ASX) — has resulted in approximately $50 billion in lost value, restricting the company’s ability to pursue major mergers and acquisitions.

Management Pushes Back, But Investors Remain Vocal

Rio’s board urged shareholders to reject the call, warning that any consolidation would involve significant tax complications and cost hundreds of millions of dollars, without delivering meaningful benefits.

Still, the nearly 20% vote in favor reflects mounting pressure from some investors for greater structural efficiency. The miner’s management now faces calls for further transparency and engagement on the matter. While the resolution failed, the campaign has drawn attention to what some perceive as Rio’s comparative inefficiency versus rivals like BHP, which ended its own dual listing in 2022.

Rio's Structure and the Palliser Alternative

Currently, Rio operates as two entities — Rio Tinto plc (UK) and Rio Tinto Ltd (Australia) — sharing all profits and liabilities. Under Palliser’s plan, the company would shift to a single parent headquartered in Australia, with a secondary listing in London, potentially streamlining governance and improving capital flexibility.

In a statement following the vote, Rio reaffirmed its commitment to engaging with shareholders on corporate structure but maintained that a previous independent review concluded a unification was not in shareholders’ best interests.