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(Bloomberg) — Rio Tinto Group (RIO.L) has rebuked a call from activist investor Palliser Capital UK Ltd. to unify its dual listing into an Australian-domiciled holding company, saying tax costs would amount to billions and there was nothing to gain.
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Palliser has been asking Rio to end its London listing since May, arguing unification could “unlock $28 billion of upside in the near term” for shareholders and that the current structure had cost investors $50 billion.
“The Board firmly rejects Palliser’s claim of $50 billion of lost value over the past 30 years, of which Palliser states $35.6 billion is attributable to structural impediments caused by the DLC structure,” Rio said. “Contrary to Palliser’s claims, unification is not a low-cost decision from a tax perspective.”
Glencore Plc (GLEN.L), another mining giant, on Wednesday said it’s studying whether to move its primary listing away from London, as a flux of companies exit the UK capital in search of deeper liquidity and heftier valuations. BHP Group (BHP) did so in 2022, while oil major Shell Plc (SHEL.L) has been considering a move to the US.
Rio’s board said it conducted an independent review of the listing structure last year, but failed to find any benefits. The company recommended shareholders vote against a Palliser motion to engage an independent firm to conduct another study.
Rio’s share register is far more weighted to London compared with BHP’s at the time. It has about three-quarters of its stock listed in the UK.
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