Rio Tinto: A Compelling Case to Unify Now
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A First-Class Asset Portfolio Trapped Inside an Outdated Structure
Despite its world-class portfolio of diversified mining assets, Rio’s outdated dual-listed company (DLC) structure remains a governance concern, strategic impediment and value roadblock.
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The DLC Has Destroyed US$50 Billion of Shareholder Value since Inception…
Rio’s inability to issue stock for M&A has cost shareholders an unnecessary c.US$35.6 billion in book value. Legacy structure has wasted c.US$14.7 billion in valuable franking credits.
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…and is the Root Cause of Rio Tinto’s Undervaluation Today
US$24 billion structural value gap between Rio Tinto Plc (LSE/NYSE) and Rio Tinto Ltd (ASX) shares. Rio trades at a significant discount to underlying value and at a steep discount to global mining peers.
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This Archaic Structure is Not Fit for the Corporate World of Today
Management’s arguments against unification do not stack up. Every other large cap DLC has already unified – BHP is a clear blueprint for success.