Proxy adviser backs Palliser’s pursuit of unifying Rio Tinto’s dual-listed structure

London-based Palliser Capital on Friday said a proxy advisory firm has advised Rio Tinto shareholders to vote in favour of the hedge fund’s resolution to re-evaluate the unification of Rio Tinto’s dual-listed structure at the miner’s annual general meeting.

Glass Lewis has expressed concerns about Rio’s board falling short of investor expectations and failing to respond or defend against Palliser’s proposal, deeming it in best interests of shareholders to vote in favour of its requisitioned resolution, Palliser said.

Rio Tinto currently operates with a dual-listed structure, maintaining separate shareholder bases in the UK (Public Limited Company) and Australia (Limited). As a result, the company is required to hold two annual general meetings: one in London on April 3 and another in Perth on May 1.

Palliser said Glass Lewis viewed the costs of the enhanced review as justified, given that unification could unlock “potential value in the billions of dollars”.

Palliser last week released a letter citing a report that identified a share price disparity between the UK and Australian listings, which it said limits Rio Tinto’s ability to pursue major stock-based mergers and acquisitions and complicates equity capital raising.

The larger BHP Group, after facing pressure from activist investors, eliminated its dual-listing structure in 2022 and now primarily lists in Australia.

(By Prerna Bedi and DhanushVignesh Babu; Editing by Alan Barona)