By Adam Whittaker

Activist investor Palliser Capital is stepping up a campaign to push Rio Tinto to abandon its primary London listing, urging the miner to allow Australian shareholders to vote on a resolution that calls for an independent review into its dual-listing status.

In a letter seen by The Wall Street Journal, the U.K.-based hedge fund called on the company's board to table an identical resolution at its Australian annual general meeting after it was omitted from the meeting agenda.

Rio Tinto didn't immediately respond to a request for comment.

The corporate structure of Rio Tinto means that it hosts two AGMs--one for shareholders of its U.K-listed PLC and one for shareholders of its Australian-listed limited company.

Palliser currently manages around $1.1 billion in assets and owns a roughly $300 million stake in Rio Tinto, which has a market capitalization of some $108 billion. In a letter to Rio Tinto's board in December, Palliser said its investment in the company was one of its largest public equity positions.

Palliser tabled a motion calling for a review into whether unifying its corporate structure in Australia is in the best interests of shareholders, and had expected it to be put to a vote for both sets of shareholders based upon historical precedence. The investor previously said its proposal had the support of more than 100 Rio Tinto shareholders.

However, in documents published by Rio Tinto ahead of its respective AGMs, the resolution was only put to its U.K. shareholders. Palliser said in the letter that the move disenfranchised Australian investors and denied a fair and democratic shareholder vote on a topic of equal importance to them.

Around 77% of Rio Tinto's shares are listed in London, with the remaining 23% in Sydney.

The letter is Palliser's third in the last few months as it continues to call for a change in Rio's dual-listed structure, which the investor argues destroys shareholder value and is the root cause of the miner trading at a steep discount to peers. The investor said Rio Tinto's current structure prohibits stock-based mergers and acquisitions.

Rio Tinto rejected the calls and urged its U.K. shareholders to vote against the resolution, saying that it had already conducted similar studies. It said the dual-listed structure provides it access to significant liquidity and the ability to pursue share-based merger activity, while unifying the corporate structure would result in tax costs in the mid-single digit billion of U.S. dollars.

Palliser was launched in 2021 by James Smith, who previously headed the Hong Kong operations of Elliott Investment Management. The firm has previously urged changes at South Korea's Samsung C&T, the de facto holding company of the Samsung Group, and SK Square, the biggest shareholder in South Korean chip maker SK Hynix.

Write to Adam Whittaker at adam.whittaker@wsj.com

(END) Dow Jones Newswires

February 24, 2025 10:36 ET (15:36 GMT)

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