An activist investor has called for Glencore to shift its listing from London to Sydney and improve cash returns to jump-start its share price.
The activist, Tribeca Investment Partners, an Australian hedge fund, has reportedly written to the company’s board with a list of proposals to boost the company’s flagging share price.
The proposals included shifting the company’s primary stock market listing from London to Sydney, spinning off its coal business into a new entity, returning more cash to investors and divesting a minority stake in its lucrative trading division.
The fund’s letter, which was first reported in the Financial Times, noted that Glencore’s shares have underperformed rivals since the company’s listing in 2011. The fund said the company had generated shareholder returns of nine per cent since listing in 2011 versus 95 per cent for BHP and 126 per cent for Rio Tinto.
“It is through these actions that the company can increase shareholder return and close the valuation gap,” Tribeca said.
BHP shifted its primary listing to Australia in 2022 and Ben Cleary, portfolio manager of Tribeca Global Natural Resources, said Glencore should consider doing the same. “London is no longer the home of mining,” the fund manager wrote in the letter.
He added: “The LSE has a comparatively low appetite for mining investment and is no longer suitable as the company’s primary bourse.”
According to the FT, which cited people familiar with the matter, Tribeca owned just $300m (£234m) of Glencore shares and derivatives.
This small stake (compared to the company’s market capitalisation of £49bn) is unlikely to be enough to convince the company to make major changes to its business model.
However, the letter does raise some serious questions about London’s attractiveness to international companies.
London used to be the go-to location for materials companies to list, but that’s changed in recent years. Glencore has said it will spin off its coal business when its merger with Teck is complete, but sources have suggested the mining company will look to list the business in New York.
And even though its stake in Glencore is small, Tribeca has been successful in convincing other mining groups, notably BHP and Teck, to split up or sell businesses.