Wall Street hedge fund Third Point has called to break up Royal Dutch Shell after acquiring a $750m majority stake in it.
Third Point is urging the oil giant to split up into multiple companies to increase its performance and market value, accusing Shell of having an “incoherent” set of strategies for its businesses, a source told Reuters.
The oil multinational is in fact facing pressures from investors and other stakeholders to decarbonise its operations.
Hinting at these pressures, hedge fund’s founder Daniel Loeb reportedly told clients there is room for “improvement across the board at Shell”, but did not say how many companies he wanted Shell to form.
“Shell has too many competing stakeholders pushing it in too many different directions,” Loeb told clients in a letter that was seen by Reuters.
Shell, which is expected to release its third quarter results tomorrow, has confirmed it had talks with Third Point.
It “regularly reviews and evaluates the company’s strategy with a focus on generating shareholder value,” the multinational said in a statement. In its second quarter, Shell registered $5.53bn in adjusted earnings, the majority of which came from oil and natural gas, followed by refining and trading and marketing.