US hedge fund calls for break-up of Shell
All eyes will be on Shell when the stock market opens this morning as a leading US hedge fund pushes for the oil giant to be broken up.
New York-based Third Point, run by activist investor Daniel loeb, has taken a stake worth more than £500m in the FTSE100 firm and accused it of having an ‘incoherent’ strategy. It urged Shell to split itself into ‘multiple standalone companies’ including an arm focused on oil and gas and another that houses renewables.
The move comes as Shell, like other oil giants, battles to cut greenhouse gas emissions.
According to the FT last night, a letter to shareholders from Third Point said Shell had ‘too many competing stakeholders pushing it in too many different directions, resulting in an incoherent, conflicting set of strategies’.
In a statement, the oil group said: ‘Shell regularly reviews and evaluates the company’s strategy with a focus on generating shareholder value.
‘As part of this ongoing process, Shell welcomes open dialogue with all shareholders, including Third Point. Shell’s investor relations team has had preliminary conversations with Third Point and we will engage with them, as we do with all of our shareholders.’
Insurer Admiral sank to an 11month low after a major investor dumped a sizeable stake.
Munich Re, one of the world’s largest reinsurers and a prominent shareholder, offloaded 12.1m shares, cutting its holding to less than 5pc compared to 9.9pc at the start of September.
Based on the Tuesday closing price of 3047p Munich Re could have pocketed around £369m.
Admiral hit an all-time high of 3688p in August but last night fell 5.5pc, or 168p, to 2879p. The decline followed a strong first half during which profits ballooned by 76pc year-on-year to £482m in the six months to the end of June, which may have sparked a bout of profit-taking.
The FTSE 100 dropped 0.33pc, or 24.35 points, to 7253.27, while the FTSE 250 rose 0.05pc, or 10.77 points, to 23,172.04. Markets seemed unsure of which way to turn in the wake of Chancellor Rishi Sunak’s Budget announcements, although plans to cut alcohol duty lifted publicans.
Plans to cut air passenger duties also provided a small, early-trading boost to airline stocks, with British Airways-owner IAG inching up 0.01pc, or 0.02p, to 159.96p although Easyjet dropped away eventually, closing down 0.2pc, or 1p, to 608.4p. Bus and train operator First Group tracked up 4.5pc, or 4.35p, to 100.5p after unveiling plans to return £500m to shareholders by buying back shares.
It is offering 105p per share, a 9.2pc premium to its closing price on Tuesday. The offer runs until November 29. It originally announced the payout in July after a £2.3bn deal to sell US arms First Student and First Transit.
Emergency repairer Homeserve rose 2.8pc, or 23.5p, to 855p after snapping up rival CET Structures for £53m. CET provides plumbing, heating and electrical services to home insurance policy holders. The firms will serve around 4.9m homes. Video game publisher Team 17 fell 0.7pc, or 5p, to 720p despite unveiling a phone app based on lego versions of Marvel superheroes. The app, which provides ‘learning adventures and imaginative play’ for children, will be launched in 28 languages.
Network International, a Middle East-focused provider of payment services flagged 19pc revenue growth in the third quarter. Strong trading in the UAE boosted performance, while payment volumes processed recovered to pre-pandemic levels. Shares fell 4.4pc, or 16.1p, to 351.3p.
Shares in Premier Inn-owner Whitbread rose 0.6pc, or 19p, to 3312p after a target price hike from analysts at Morgan Stanley. The broker raised its target to 3800p from 3700p.