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July 18, 2024
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Fresh blow for City as hedge fund urges Glencore to switch listing to Sydney

Glencore has come under attack from an activist investor who has told the mining giant to move its main listing from London to Australia.

In a stinging 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 shifting 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 the company’s primary bourse.’

Tribeca said Glencore had provided shareholder returns of 9 per cent since listing in 2011, versus 95 per cent for mining rivals BHP and 126 per cent for Rio Tinto.

Tribeca controls approximately £234million of Glencore through shares and derivatives, according to sources.

The comments are the latest hammer blow for London, which is increasingly coming under strain from companies looking to list elsewhere.

Two years ago, the FTSE 100 lost Anglo-Australian mining giant BHP after it decided to call it quits.

Shareholders had been concerned about the company’s complicated dual listing structure and opted to move Down Under.

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And the worry is that history could repeat itself.

A decision for Glencore to jump ship would cause further misery to the London market, which has seen a steady flow of firms hanging up their hats.

Building materials group CRH, which had been a member of the FTSE 100, and the Irish construction firm Kingspan both de-listed last year.

Travel giant Tui and gambling giant Flutter have both said they will do the same later in 2024.

But it’s not just the listing that the activist investors are concerned with.

Tribeca has also urged Glencore to abandon a plan to spin off its profitable coal business following its takeover of Canada’s Teck Resources business for £5.6bn.

‘We firmly oppose such divestiture and call on the board to retain these world class assets,’ Tribeca said in a letter to Glencore.

‘Not only does retention align with the company’s long-held commitment to industry-leading policy, but also strategically supports its earnings profile and the delivery of value to shareholders,’ it added.

The Australian hedge fund also suggested increasing dividends by discontinuing share buybacks and divesting a minority stake in Glencore’s lucrative trading division via an initial public offering instead of spinning off its coal business, the FT said.

Glencore declined to comment on the letter.

Last month another activist investor unleashed an extraordinary attack on Glencore, calling for chief executive Gary Nagle to be ousted.

In a letter to the board, Bluebell Capital branded Nagle as an Austin Powers-style Mini-Me version of the company’s former boss Ivan Glasenberg, who remains a top shareholder with a 10 per cent stake.

Bluebell, which has also recently publicly criticised oil giant BP’s green energy strategy, said it has sold its stake in Glencore and has no plans to reinvest after losing faith in Nagle.

Over the past 12 months, Glencore’s shares have plunged 12 per cent.

In February the group slashed its dividend after earnings halved because of the easing of turmoil in global commodity markets which was triggered by Russia’s invasion of Ukraine.

Glencore cut shareholder payouts to £1.3billion, from £5.6billion a year earlier, as the trader focuses on driving down debt.

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