By Adam Whittaker and Rhiannon Hoyle

Activist investor Palliser Capital said a report that it commissioned into Rio Tinto's corporate structure supports its view that the global miner should abandon its primary London listing and unify its corporate structure into a single Australian-domiciled company.

Palliser, a U.K. hedge fund, engaged Grant Thornton Australia to examine whether the advantages of unification outweigh the disadvantages for both U.K. and Australian investors.

The report's conclusions were published ahead of a vote by Rio Tinto shareholders on Palliser's resolution calling for an independent review into its listing status. Rio Tinto's U.K.-listed shareholders will vote on April 3, while its Australian-listed shareholders will vote on May 1.

In a letter sent to Rio Tinto's chairman on Monday, Palliser said the report bolsters its case that the mining company was wrong to reject its calls to unify and urge its shareholders to vote against the resolution.

Rio Tinto didn't immediately respond to a request for comment.

Palliser, which owns a roughly $300 million stake in Rio Tinto, argued that the dual-listed structure destroys shareholder value, prevents stock-based mergers and acquisitions, and keeps the miner trading at a steep discount to peers.

Rio Tinto, however, previously said a review it conducted last year found that its dual-listed company structure continues to be effective and provide benefits to the company and shareholders. Rio Tinto said it periodically reviews the DLC, but its board undertook an especially deep review of the DLC structure in 2024, which came to those conclusions.

Grant Thornton's report concluded unification would make Rio Tinto better able to pursue stock-based deals and conduct share buybacks. Rio Tinto executives have rejected the idea that the existing structure is an obstacle to dealmaking.

Unification would deliver a near-term benefit to U.K.-listed shareholders and, over the long run, be neutral or value accretive for Australian shareholders, the report said.

Rio Tinto said its current structure supports the group's shareholder returns and is demonstrated by the fact that, in London, it is one of the top five dividend payers in the FTSE 100. Rio Tinto's board previously said they believe Palliser's claims are unfounded and misleading.

Rio Tinto's own review last year included substantial input from Goldman Sachs and J.P. Morgan as external financial advisers, and Linklaters and Allens as legal advisers, while a detailed tax analysis was undertaken by EY, the miner said.

Grant Thornton also concluded that the increased proportion of Australian shareholders post-unification would allow for the greater use of franking credits. These refer to tax credits passed on by Australian companies to their shareholders with dividend payments.

The tax costs associated with unification have been contested by Palliser and Rio Tinto. The miner believes they will be in the mid-single-digit billions of U.S. dollars. However, Grant Thornton found Palliser's view that unification may trigger one-off transaction costs of around $450 million and additional tax costs of around $145 million a year to be reasonable.

Grant Thornton's analysis of shareholder registers suggests there would likely be broad-based support for unification amongst Rio Tinto shareholders based on their significant overlap with shareholders of companies that recently voted to unify.

Write to Adam Whittaker at adam.whittaker@wsj.com and Rhiannon Hoyle at rhiannon.hoyle@wsj.com

(END) Dow Jones Newswires

March 10, 2025 06:04 ET (10:04 GMT)

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