Daniel Loeb’s Third Point LLC takes over a majority stake in Royal Dutch Shell Plc and is encouraging the oil giant to split into two companies to retain and attract investors.
- The activist is the latest to urge a major oil firm to change its strategic focus, as the companies face calls to cut fossil fuel investments and invest in renewable energy amid climate change worries.
- Third Point’s equity stake is valued at over $500 million, making the hedge fund one of Shell’s biggest investors.
- In a letter to its investors, Third Point stated that Shell should try to create two stand-alone companies: one with legacy businesses and another that houses renewables and other units requiring significant investment.
- Among its peers, Shell has been faster-moving in terms of remaking its business and reducing emissions than its peers such as Exxon.
Shell has a market value of close to $200 billion. Third Point estimates that a new company including Shell’s liquefied natural gas, renewables and marketing businesses.
RDS.A up +2.27%
Source: The Wall Street Journal.