The activist said Shell should consider creating two stand-alone companies: one with legacy businesses such as refining that would provide steady cash flow and another that houses renewables and other units requiring substantial investment. It reasons that doing so would clarify the company’s strategy and appeal to different sets of investors who have been making competing demands of the Anglo-Dutch company.
Analysts say shareholders could be receptive to splitting the company. “Investors have generally pushed back against the hybrid model and are looking for ways to see these companies crystallize value” by carving out lower-carbon businesses, said Christyan Malek, an analyst at JP Morgan.