Activist fund Third Point calls for break-up of Shell

Financial Times | Royal Dutch Shell is under pressure to break itself up after the activist hedge fund Third Point built a large stake and accused the oil supermajor of being bogged down by an incoherent strategy.

Mark van Baal, head of Follow This, an activist shareholder group which holds a small stake in Shell, expressed scepticism over whether a break-up of the company would have any significant environmental benefit.

“At first sight, I don’t see how this will help in the fight against climate change — and that is because there is no substantial renewables part of Shell yet. I don’t see what needs to be split up,” Van Baal said. “We think it’s better to generate cash flow with fossil fuels and invest this in renewables.”

But others argued it could be a watershed moment. “It will force Shell to answer a question that has been on the minds of investors for some time: do legacy oil companies like Shell actually add any value to the low-carbon transition?” said Andrew Logan, senior director for oil and gas at Ceres, Inc., which co-ordinates investor climate action. “If nothing else, the move by Third Point signals that Shell has not convinced the investment community that there is value in keeping all of these businesses in house.”

Read the full story in Financial Times