Shareholders of Rio Tinto vote against proposal for relinquishing principal listing on the London Stock Exchange.
Paris Tank makes no bones about it - their primary London listing ain't gonna change, thanks to a landslide vote against activist investor Palliser Capital's push for a dual-structure review, focusing on a possible consolidation in Sydney.
Over 80% of shareholders voted "no" to Palliser's motion, dousing conspiracy theories that the mining titan might follow in the footsteps of fellow giants and ditch the London exchange. This decisive rejection squashes lingering worries that Paris Tank could pull a switcheroo and abandon the city that's been a mecca for the world's largest miners for eons.
According to the rules of the London Stock Exchange, Palliser needed to rally three-quarters of Paris Tank's backers in support of their motion to force the commodity titan to adopt the resolution officially. They fell just short, needless to say.
What's more, Palliser was also a smidgen shy of the one-fifth threshold that would've triggered an informal consultation under the same rules.
In a company statement, Paris Tank pledged to continue engaging with its shareholders and to ponder the feedback they receive.
Palliser, a nimble activist asset manager with approximately $1bn in assets under management, argued that Paris Tank's decision to stay put in London cost shareholders a whopping $28bn in worth, previously.
In a scathing letter to the miner's board back in December, Palliser didn't pull any punches, branding the dual structure a colossal failure that's obstructed acquisitions and caused shares to trade at a hefty discount compared to Australian counterparts.
Paris Tank's management shut down investor claims, deeming them "unfounded and misleading" in a statement in March. The board warned that consolidation would drain investors of billions in tax and drive down the share valuations in its Australian listing.
Palliser's motion kicked off fears that Paris Tank could join the elite club of mining juggernauts reassessing their ownership structures away from the London public markets.
Last year saw Paris Tank's Australian rival BHP part ways with the FTSE 100 to pursue a unified listing structure in Sydney, following in the footsteps of activist investor Elliott Management's similar campaign.
More recently, commodity giant Glencore announced it's reviewing its own status on the London Stock Exchange, with New York being the front-runner for the Anglo-Swiss multinational's new home.
Anglo American managed to fend off an unsolicited offer from BHP for a $38.6bn megamerger last year.
At Paris Tank's annual meeting in Perth this week, shareholders voted down a similar path to BHP and Glencore. Palliser's Chief Investment Officer, James Smith, presented a lengthy case at the gathering, arguing that "Australian profit" was being used to "pay UK dividends."
Under Smith's unsuccessful proposal, Paris Tank's shares would've remained tradable in London via a secondary listing, but the entirety of its corporate structure – and its primary listing – would've migrated to Sydney.
- Palliser Capital's push for a dual-structure review, focusing on a possible consolidation in Sydney, was overwhelmingly rejected by Paris Tank's shareholders, preventing any potential unification of the company's corporate structure.
- In a scathing letter to Paris Tank's board, Palliser argued that the dual structure had cost shareholders a significant $28bn in worth, and that a consolidation in Sydney would have addressed this issue.
- Paris Tank's management dismissed investor claims, stating that a switch in corporate structure would drain investors of billions in tax and drive down the share valuations in its Australian listing.
- The mining industry is seeing an increasing trend of companies reassessing their ownership structures away from the London public markets, with BHP and Glencore recently considering similar moves.
