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Activist Third Point Urges Shell to Break Into Two Companies

TheStreet logo TheStreet 10/27/2021 Tony Owusu
Activist Third Point Urges Shell to Break Into Two Companies © TheStreet Activist Third Point Urges Shell to Break Into Two Companies

Third Point, activist investor Daniel Loeb's investment firm, is urging oil company Royal Dutch Shell to break up into two different companies in order to retain and attract investors.

Third Point says Shell should consider creating a stand-alone company with its legacy oil business and another company that focuses on renewables and green energy, according to an investor letter viewed by the Wall Street Journal.

Third Point's stake in the company is worth over $500 million, the Journal reported citing anonymous sources, making it one of the company's largest investors. Shell has a market value of nearly $200 billion, according to Wednesday's report.

Earlier this year, a Dutch court ruled that Shell must cut its emissions by 45% by 2030. The Journal reports that Shell has been more amenable to making changes than its peers, but the company has said it plans to appeal the Dutch court's decision.

In September, Shell reported an agreement to sell its Permian basin assets to ConocoPhillips for $9.5 billion in a deal that with transfer all of the company's interest in 225,000 net acres in the Permian basin to ConocoPhillips.

Top executives from Exxon Mobil , BP America , Chevron and Shell are scheduled to testify at a congressional hearing Thursday examining whether the fossil fuel industry led an effort to mislead the public and prevent action to curb climate change.

Shell President Gretchen Watkins is one of the executives scheduled to address the House Oversight Committee.

Shell shares were rising 1.9% to $49.80 at last check Wednesday.

This article was originally published by TheStreet.

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