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Glencore has come under fire from an activist investor who has told the mining giant to move its main listing from London to Australia.
In a scathing letter, Australian hedge fund Tribeca Investment Partners wrote to Glencore’s board with a list of proposals to boost the share price.
Top of the agenda was to move the listing to Sydney, where the fund believes Glencore would receive a better valuation.
In the letter seen by the Financial Times, Tribeca said: ‘London is no longer the home of mining.
“The London Stock Exchange has a comparatively low appetite for mining investment and is no longer suitable as a primary corporate exchange.”
Digging in: Australian hedge fund Tribeca Investment Partners wrote to Glencore board with list of proposals to boost share price
Tribeca said Glencore had delivered shareholder returns of 9 percent since its IPO in 2011, compared with 95 percent for mining rivals BHP and 126 percent for Rio Tinto.
Tribeca controls approximately £234 million of Glencore through shares and derivatives, according to sources.
The comments are the latest blow for London, which is increasingly under pressure from companies seeking to list elsewhere.
Two years ago, the FTSE 100 lost Anglo-Australian mining giant BHP after it decided to quit.
Shareholders were concerned about the company’s complicated dual listing structure and opted to move Down Under.
And the worry is that history could repeat itself.
A decision by Glencore to abandon ship would cause further misery in the London market, which has seen a steady stream of companies hanging up their hats.
Building materials group CRH, which had been a member of the FTSE 100, and Irish construction company Kingspan delisted last year.
Travel giant Tui and gaming giant Flutter have said they will do the same later in 2024.
But it’s not just the price that worries activist investors.
Tribeca has also urged Glencore to abandon a plan to spin off its profitable coal business following its £5.6bn acquisition of Canadian business Teck Resources.
“We strongly oppose such divestiture and ask the board of directors to retain these world-class assets,” Tribeca said in a letter to Glencore.
“The retention not only aligns with the company’s long-standing commitment to an industry-leading policy, but also strategically supports its earnings profile and delivery of value to shareholders,” he added.
The Australian hedge fund also suggested raising dividends by halting share buybacks and selling a minority stake in Glencore’s lucrative trading arm through an initial public offering rather than spinning off its coal business, the Financial Times said.
Glencore declined to comment on the letter.
Last month, another activist investor unleashed an extraordinary attack on Glencore, calling for the ouster of CEO Gary Nagle.
In a letter to the board, Bluebell Capital called Nagle an Austin Powers-style Mini-Me version of former company boss Ivan Glasenberg, who remains a major shareholder with a 10 percent stake.
Bluebell, which also recently publicly criticized oil giant BP’s green energy strategy, said it sold its stake in Glencore and has no plans to reinvest after losing faith in Nagle.
In the last 12 months, Glencore shares have plummeted 12 percent.
In February, the group cut its dividend after profits halved due to easing of turmoil in global commodity markets caused by Russia’s invasion of Ukraine.
Glencore reduced payouts to shareholders to 1.3 billion pounds, from 5.6 billion pounds a year earlier, as the operator focuses on reducing debt.