(Alliance News) - Rio Tinto PLC called on shareholders to reject an annual general meeting motion that may have seen the miner call time on its London primary listing.
In a meeting motion by Palliser Capital, the activist investor pushed Rio to probe whether a unification of the miner's dual-listed structure would be in the interests of shareholders. Shareholders will vote on the motion at the annual general meeting on April 3.
If approved, the proposal will see Rio commission an "independent expert report from a leading international firm".
"The board considers that resolution 24 is against the best interests of shareholders and of Rio Tinto as a whole and unanimously recommends that you vote against resolution 24," Rio Tinto said in a document on Thursday.
Rio, listing in London and Sydney, believes its dual-listing structure "continues to be effective and provide benefits to Rio Tinto and its shareholders".
"The DLC structure provides access to significant depth of liquidity in demand for, and trading of, Rio Tinto shares. This is achieved through primary listings and premium index inclusion in two major capital markets and mining investment centres, with a pre-eminent position in the UK market," it added.
"The board firmly rejects the notion that the DLC structure has resulted in value destruction of USD50 billion, and reiterates its strong focus on sustainable shareholder value creation and effective capital management."
Palliser in December called on Rio to abandon its "outdated" dual listing structure. Palliser said Rio should follow rival BHP Group Ltd, which moved its primary listing to Sydney in 2022.
If Rio Tinto were to relinquish its primary listing in London, it would no longer be eligible to be on the FTSE 100.
The firm believes ending the DLC would be "value destructive". The listing structure it currently has means Rio Tinto has "provides flexibility to raise capital, pursue strategic M&A and deliver shareholder returns".
Glencore PLC on Wednesday said it may consider transferring its primary listing out of London if it becomes clear that another venue would be a "better one".
Speaking at a post-earnings call, Chief Executive Gary Nagle said the miner and commodity trader "ultimately" wants to ensure its shares are traded at the "right exchange".
Glencore is a FTSE 100 constituent owed to its size and primary listing in London. Should it move its primary listing away from London, it would no longer form part of the FTSE 100 and would deliver another big blow to London as a financial centre. Glencore is also listed on the Johannesburg Stock Exchange.
"If there's a better one, and those include the likes of the New York Stock Exchange, we have to consider that," Nagle said.
By Eric Cunha, Alliance News news editor
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