Investment fund Third Point LLC has acquired a large amount of Shell shares and is demanding that the Dutch oil and gas company split up to become more attractive to investors. That reports the American business newspaper The Wall Street Journal (The WSJ) on Wednesday, which saw a letter in which the investment fund explains this course to its own shareholders. Third Point, the American fund of activist investor Daniel Loeb, is said to own 500 million dollars (430.9 million euros) in Shell shares, making it one of the largest shareholders of the multinational.
Also read this piece from 2018: Activist investor Loeb is back in the country. What does he want with NXP?
Third Point would like Shell to split into two separate companies. One should focus on established areas of the business, such as oil refining, which provide “constant cash flow.” The second company should then focus on business areas that currently “require significant investment,” such as renewables, it writes The WSJ. The split would clarify Shell’s business strategy and make it more attractive to investors with different demands on the company.
This isn’t the first time activist investor Loeb has attempted business change in this way. Earlier, he forced Internet company Yahoo to replace its own top, after which he could sell his shares back for a premium. In the Netherlands, Third Point bought 3 percent of the shares of DSM seven years ago. After the takeover, the chemical group divested a number of activities under pressure and its profitability improved sharply. Since its inception in 1995, Third Point has had an average return of over 15 percent and has approximately $17 billion under management.
#American #investment #fund #split #Shell #companies