Rio Tinto has hit back at calls for it to ditch its London listing in favour of Australia, arguing that claims made by an activist investor were both “unfounded and misleading.”
The mining giant holds a dual-listing in the UK capital and Sydney, but has faced pressure from investors to abandon its current set up in favour of an Australian-domiciled holding company.
Palliser Capital has the support of the influential proxy advisers’ Glass Lewis and Institutional Shareholder Services (ISS).
It has brought a motion for Rio Tinto to form a committee of independent directors to review whether a unification is in the best interest of shareholders.
But in a statement on Wednesday, the miner urged shareholders to vote against the proposals, arguing they would be “value destructive” for the group and its shareholders.
In a boost for London markets, Rio Tinto said investors’ assertions that its dual structure was responsible for an erosion of around $50bn (£38.5bn) off its value were “unfounded and misleading”.
“The rationale for unifying dual-listed companies (DLC) structures at other companies (including BHP) does not apply to Rio Tinto for several reasons, including the location, growth outlook and tax profile of the group’s assets, and the scale of the entity to be absorbed by the acquiring entity in any DLC unification,” it said.
The miner added it had already conducted a “comprehensive review” of a unification, “the conclusions of which are clear.”
Shares in Rio Tinto are down 1.4 per cent over the last year. However, stock has outperformed the FTSE 100 and Australia’s ASX200 since its dual structure was formed back in 1995.