https://youtu.be/eR9NbJLUM5w
Above; a YouTube clip of Shell’s CEO Ben van Beurden being slandered by a teenage activist recently.
Dear Mr Loeb,
As a shareholder of 6,060 RDS “B” shares, I am writing this open letter to you to lend my support to your efforts to have Royal Dutch Shell broken up.
You will realise of course that whilst what is referred to as Shell’s “legacy business” is very much a going concern, the “Green business” (for want of a better term) is very much less so. I therefore suggest a way forward that will benefit the owners of the company: We the shareholders!
By all means split RDS in two but how?
I suggest that the Green business is incorporated in the Netherlands and for the legacy business to be incorporated in England and Wales. The question is who will want to buy the shares of the Green business? Given that it will no longer have the income stream from the legacy business to sustain it?
As an experienced businessman however you will know that it is possible to sell most things providing the price is low enough! I therefore propose that Shell split by a rights issue. Now I realise that based in the USA there are legal restrictions that apply to you and your company from partaking in a UK style rights issue. However since you and your company are not too interested in the Green business this should not be an issue for you!
The rights issue would of course enable the existing holders of RDS “A” and RDS “B” shares to acquire these shares at a bargain basement give-away price! Doubtless all the Green shareholders would be eager and willing to take up the issue. Those rights issue shares that were not taken up would be sold off onto the market by the guarantors – who will charge a suitably high fee!
The question than is what to do with the legacy business?
I suggest a merger with BP!
This would enable a substantial rationalisation programme – sorry, I’m being politically incorrect aren’t I? I mean of course the implementation of a reorganisation to facilitate cost synergies! This would mean that holders of RDS “A” shares would receive one RDS “B” share for each “A” share.
I suggest that the management of BP should take over the job of running the new merged entity.
It is a well known FACT that mergers and take-overs often result in an increase in share price – especially in the run up. This will be a GOOD THING as it will enable many institutional investors to disinvest and get their money back so they can go and invest the proceeds in other more “environmentally friendly” businesses – like Tesla!
Of course, the new much larger British Petroleum PLC will be the UK’s largest company! It will have the ear of the UK government! After the split (green and legacy business), we holders of RDS “B” shares should receive a number of newly issued BP shares (which would rank pari passu with existing shares). I suggest that each RDS “B” holder should receive SIX BP shares for every ONE “B” share held.
The idea is this: Let all those investors who do not want to invest in what they call “fossil fuels” leave! If you provide for them an opportunity to “get their money back” then if they have any common sense (I accept that this is a rarity amongst climate change campaigners) they will grab that opportunity with both hands! This will allow the new company to be owned by people who are happy with the new – or old – direction of the company!
As an experienced businessman you will know that it is essential for all businesses to have people all working toward a common purpose and are supportive of the management’s strategy.
I would caution you against selling the legacy business to a US oil company. Whilst as a US Citizen you would be pleased to see a large number of jobs created in the USA – at the cost of a loss of British jobs (along with Dutch and others), you have to realise that British (and Dutch) politicians will be very much against this! Please ensure that as many British (and Dutch) jobs are saved as is possible! I know US politicians will be urging you to support US commerce and that as “an American” you regard the USA as simply the best country on Planet Earth; please accept and understand that those of us who live on the “other side of the pound” are NOT of the same opinion!
Some metrics:
RDS
Shares in Issue: 11,391m
Market Capitalisation: £187,909m
52 Week High: 1,813.40
52 Week High Date: 20-Oct-2021
52 Week Low: 959.60
52 Week Low Date: 06-Nov-20
BP
Shares in Issue: 19,938m
Market Capitalisation: £67,281m
52 Week High: 366.40
52 Week High Date: 18-Oct-2021
52 Week Low: 198.50
52 Week Low Date: 06-Nov-2020
SOURCE URL: https://www.lse.co.uk/
DATE: 4 November 2021.