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Dan Loeb adds to Shell stake despite doubling down on break-up calls

CITYA.M.

Dan Loeb adds to Shell stake despite doubling down on break-up calls

: SUNDAY 08 MAY 2022 12:29 PM

Activist investor Daniel Loeb has revealed he has added to his stake in energy giant Shell despite doubling down on calls for a shake-up to the energy major’s corporate structure.

Loeb, who revealed in October that his hedge fund Third Point had taken $750m stake in Shell, told his investors last week that he had upped his stake in the firm and had held discussions with the firm’s bosses.

Loeb said the discussions were “constructive” and that the company’s stock price had gains on the horizon with “proper management”, Reuters first reported.

Shell’s decision to shift its headquarter from from the Netherlands to the UK and to create a single shareholder class was also applauded by Loeb in the letter, which he said offered the firm greater flexibility.

“This move allows greater flexibility to modify its portfolio (either through asset sales or spin-offs) and allows for a more efficient return of capital, specifically via share repurchases,” Reuters reported.

The letter from Loeb comes after he called in October for Shell to split its liquefied natural gas, renewables and marketing business into a separate firm, dividing it from its legacy energy business.

Loeb’s comments mark his first update to his clients on the Shell investment since first revealing his stake.

The letter also said that the shocks of war in Ukraine had underlined the strategic importance of reliable energy supplies in Europe, as well as Shell’s role in providing resilience.

“Shell’s LNG (liquid natural gas) business, the largest in the world outside of Qatar, will play a critical role in ensuring energy security for Europe,” the letter said.

It comes after a difficult period for Loeb in which his Third Point Partners Fund lost 11.5 per cent in the first quarter of the year.

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