(Releads with source comment, letter from Third Point)
By Arathy S Nair
Oct 27 (Reuters) - Activist investor Daniel Loeb's Third
Point has built a near $750 million stake in Royal Dutch Shell
, a source close to the matter told Reuters on
Wednesday, and is arguing for a breakup of the oil major.
In a letter to its own investors, seen by Reuters, Third
Point said Shell had "too many competing stakeholders pushing it
in too many different directions, resulting in an incoherent,
conflicting set of strategies."
Third Point said the creation of multiple standalone
companies would make it easier for Shell to return cash to
shareholders from "legacy" businesses such as upstream oil and
gas, oil refining and chemicals.
At the same time, a separate liquefied natural gas (LNG),
renewables and marketing business could "combine modest cash
returns with aggressive investment in renewables and other
carbon reduction technologies", at a lower cost of capital.
Third Point said it was in the early stage engagement with
Shell but was confident Shell's board and management can devise
a plan to decarbonise faster and improve shareholder returns.
The Wall Street Journal, which first reported the
development, had put the size of the stake at more than $500
million, citing people familiar with the matter.
Shell did not immediately reply to Reuters' requests for
comment and for confirmation of the size of Third Point's stake
in percentage terms. Shell's market capitalisation stood at just
under $190 billion on Wednesday.
Shell, which is due to publish third-quarter results on
Thursday, is the world's biggest fossil fuel retailer and aims
to become one of the world's biggest renewable electricity
traders.
Smaller Shell rivals Eni and Repsol have
already flagged plans to spin off parts of their renewables
businesses to help finance their transition to offering more
lower-carbon products.
(Reporting by Arathy S Nair in Bengaluru; Additional reporting
by Shadia Nasralla; Editing by Arun Koyyur and David Holmes)
