Rio Tinto activist investor pushes for LSE delisting
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The news: UK activist investor, Palliser Capital, is pushing for Rio Tinto to abandon its listing on the London Stock Exchange (LSE) and focus on strengthening its corporate structure in Australia.
The numbers: Palliser said that Rio Tinto, which is listed on both the LSE and the ASX, argues that the dual listing makes it difficult to do major acquisitions, meaning that the London-listed company is trading at a USD26 billion ($39.23 billion) discount to its Australian counterpart.
The FT reports that Rio Tinto is currently the Palliser fund’s largest investment, "worth a few hundred million pounds", holding less than 1% of Rio shares.
The context: Speaking at the Sohn Hong Kong investment conference on Thursday, Palliser’s CIO James Smith argued that the dual-listed structure is preventing Rio from chasing all-stock takeovers because of the company’s valuation gap and complex structure, adding that there is a potential of nearly a 40% upside. He said the move would unlock billions tax credits that Australian investors are eligible for.
Should Palliser’s campaign prove successful, the FTSE 100 would lose the world’s second-largest mining company, just two years after BHP departed from the exchange.
The comments come as Rio rival, BHP, continues its takeover pursuit of London-listed, Anglo American.
The source: Financial Times
