New York-based hedge fund Third Point has called on Royal Dutch Shell to split into multiple companies to improve its performance and market value. The firm, owned by billionaire investor Daniel Loeb, has bought a large stake in the Anglo-Dutch oil company. It owns some $750 million in Shell, industry sources said.
Loeb said in a letter to clients that Shell has diversified its businesses due to pressure to decarbonise. However, the diversification made its strategy “incoherent.” He did not specify how many companies it wants Shell to break into. However, he urged the 114-year-old oil giant to separate its legacy energy operations from its LNG, renewables, and trading units.
Shell on Thursday confirmed that it had preliminary talks with Third Point, adding that the company regularly evaluates and reviews its strategy with a focus on generating shareholder value. Previously, Third Point successfully pushed insurer Prudential Plc to split and urged Intel Corp to consider disjoining its chip design from its semiconductor production.
