Palliser Capital Responds to Rio Tinto AGM Results, Reconfirming Its Commitment to Reduce Destruction of Shareholder Value

Palliser Capital highlights that their campaign for a transparent and independent review of the unification of Rio Tinto’s archaic dual listed company (“DLC”) structure has served a critical purpose. It has promoted the need for better governance standards at Rio Tinto and catalyzed an improved understanding of the case for unification, despite the resolution failing to achieve sufficient shareholder support at Rio Tinto’s 2025 AGM.

Palliser reaffirms their continued commitment, as a long-term shareholder, to working constructively with the Board to enhance sustainable value for all shareholders, with James Smith, Founder and Chief Investment Officer of Palliser, stating:

“It is never easy for a small shareholder to take on the likes of a corporate giant like Rio Tinto.

However, we simply could not accept Rio Tinto’s anomalous and illogical findings that unification offers no advantages whatsoever, when almost every other DLC in the world has unlocked multiple significant benefits through a simplified structure. We co-filed our resolution to advocate for a truly unbiased and open review of the merits of unification.

It is deeply disappointing that rather than adhering to “best practice” principles, the Board chose to launch a fierce campaign – involving a vast team of costly advisors and indefensible decisions such as initially disenfranchising the Australian line from voting – all to shield its closed door internal analysis of unification from scrutiny.

While they told shareholders a robust review would divert significant resources, they likely spent more time, money and effort opposing the resolution than complying with it.

Notwithstanding the voting results, the Board has been given a clear message from the most trusted voices in the investment community – ISS and Glass Lewis. They assessed the facts presented by Rio Tinto and Palliser with an independent lens and concluded that a reasonable board would not and should not resist an independent and transparent review on this critical matter.

We are grateful to the numerous investors we engaged with and who supported our arguments throughout this process, with some of the largest and most sophisticated investors in the world voting in favour of our resolution. We will continue to engage with Rio Tinto’s shareholders and ensure that institutions are well informed of the pertinent issues, enabling them to actively challenge leadership rather than voting, as a default, in line with board recommendations.

Moreover, having shone a glaring light on their governance failings and unsubstantiated analysis, we expect to build on our work with a Board that is more willing to collaborate and listen, so that, together, we can achieve our shared goal of improving long-term shareholder value.

In this context, we note a similar experience at BHP, where initial flawed arguments to protect an almost identical DLC structure – much like those now presented by Rio Tinto – ultimately gave way to a highly successful unification.”

About Palliser Capital

Palliser Capital is a global multi-strategy fund. Our value-oriented investment philosophy is applied to a broad range of opportunities across the capital structure with a focus on situations where positive change and value enhancement can be achieved through thoughtful, constructive and long-term engagement with companies and across a range of different stakeholder groups. All available materials on Palliser’s ongoing engagement with Rio Tinto can be found at: UnifyRio.com.

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