Rio Tinto Ltd (LSE:RIO, ASX:RIO, OTC:RTNTF) shares slipped 2% to $130 in early trade after reports that activist investor Palliser Capital is urging the miner to join the race for Canada’s Teck Resources.
The approach lands ahead of newly appointed chief executive Simon Trott’s Capital Day presentation on December 4.
In a letter to Rio’s board dated October 17 and reported by Reuters on November 3, Palliser — which sources say holds about a $400 million stake, or less than 1% — urged Rio to unify its dual-listed structure and spin off a base-metals arm to create a copper-focused vehicle (“FutureMetalsCo”).
Palliser argued a bid for Teck, which has agreed a US$53 billion, no-premium merger with Anglo American, would secure a tier-one copper portfolio capable of producing a combined 1.3 million tonnes a year, diversify Rio beyond iron ore, unlock at least US$800 million in cost synergies and accelerate copper growth by a decade at lower risk and cost than greenfield projects.
Palliser contends Rio’s current London–Sydney dual listing makes a stock-based offer for Teck “structurally impossible”, leaving only costly or dilutive alternatives, and says unification is a prerequisite for any credible deal. Under its plan, Rio would first unify into a single Australia-based holding company, then ultimately split into two entities: a Canada-centred business focused on copper, aluminium and zinc, and an Australia-centred iron ore company.
Rio, responding to Reuters, said it remains focused on maximising shareholder value and will update its strategy at its Capital Day on December 4, adding that arguments over unifying the dual listing have already been extensively debated and rejected by shareholders. At the miner’s 2025 AGM, investors overwhelmingly voted against Palliser’s proposal to review the structure; the board has previously cited tax considerations and the costs of unification, and disputed that a single listing is necessary for large-scale M&A.
Teck and Anglo shareholders are due to vote on their merger on December 9.