Rio Tinto launched a staunch defence of its London listing yesterday as it faced mounting pressure to quit the UK for Sydney.
In a major vote of confidence in the City, the FTSE 100 mining giant said its board ‘unanimously recommends that shareholders vote against’ the plan put forward by activist investor Palliser Capital.
It said abandoning its dual listing in London and Sydney for a single one in Australia would be ‘value-destructive for the group and its shareholders’.
And the Anglo-Australian firm slammed ‘unfounded and misleading’ claims that the current set-up has cost investors £40billion.
The comments came as a boost for the City as the stock market is grappling with a dearth of new arrivals and an exodus of companies.
BHP, the world’s largest miner ahead of Rio, quit London for Sydney in 2022, while rival Glencore and oil giant Shell are looking at whether they should shift their main listings to New York.
City boost: Miner Rio Tinto’s board said abandoning its dual listing in London and Sydney for a single one in Australia would be ‘value destructive for the group and its shareholders’
The loss of such blue-chip stalwarts – Shell, Rio and Glencore have a combined value of more than £260billion – would be a devastating blow to the London stock market and the UK’s reputation as a place to do business.
Russ Mould, investment director at AJ Bell, said: ‘Rio Tinto couldn’t be any clearer – its effective commitment to the UK stock market will be a big relief to the London Stock Exchange.
‘The UK market has a long history with the natural resources sector and losing another big name from the FTSE 100 would mean the blue-chip index giving up part of its key identity.’
Rio’s defence of its London listing came after advisory groups Institutional Shareholder Services (ISS) and Glass Lewis urged investors to back Palliser’s calls for Rio to review its structure and list as a single entity in Australia.
ISS and Glass Lewis recommendations can be influential in guiding how investors vote on hot issues from the make-up of boards and takeovers to rows such as the one at Rio.
Shareholders will vote at the UK annual meeting in London on April 3 and the Australian meeting in Perth on May 1.
Responding to the ISS and Glass Lewis reports, Rio said that it has already conducted ‘a robust and comprehensive review’ with ‘significant input from leading external advisers, and from both Palliser Capital and our shareholders’.
It said that the conclusions were ‘clear’ and dismissed calls for another review, as suggested by Palliser.
