Plans to break up Shell suffer a setback as leading investor rejects idea
Plans to break up Shell suffered a setback as a leading investor rejected the idea.
Abrdn, formerly Standard Life Aberdeen, said the calls from hedge fund Third Point for the energy giant to be split up were too complicated and unlikely to add value.
Iain Pyle, a fund manager at Abrdn, said breaking up Shell might look like an ‘interesting proposition’ on a spreadsheet but would be hard to do because of its ‘integrated operations.’
A sure sign: Third Point wrote to investors claiming Shell was trying to be ‘all things to all people’ by attempting to turn into a renewable energy group
He said: ‘Just because Third Point says it makes compelling financial logic doesn’t mean it will happen.’
Third Point, led by Daniel Loeb, wrote to investors earlier this week claiming Shell was trying to be ‘all things to all people’ by attempting to turn into a renewable energy group.
Third Point called for the group to be broken up into ‘multiple standalone companies,’ separating its oil and gas operations and renewable energy arms. Pyle agreed with the hedge fund’s view that there was ‘hidden value’ in Shell that was not being recognised by the market. But splitting it could destroy the benefits of its integrated business model, he added.
Shell boss Ben van Beurden hit back at Loeb yesterday, saying he has always maintained that the only way to fund the company’s switch to green energy is to continue its oil and gas operations.