Shell holds talks with investors to push through London HQ move
Royal Dutch Shell is looking to persuade investors to back its plan to relocate the company’s headquarters from the Netherlands to UK.
The oil giant’s management team has set up more than 100 meetings with leading investors in recent days to push through the historic changes, sources told Reuters.
Shell announced earlier this month they would scrap dual Anglo-Dutch share structure, move to London from The Hague, and ditch the Royal Dutch branding after 114 years of holding the name.
The decision followed disputes with Dutch authorities over the 15 per cent dividend tax rate and a court ruling demanding the company reduced greenhouse gas emissions.
Shareholders will vote on the changes at a special general meeting on December 10 where the resolution needs to secure a very high threshold of votes – over 75 per cent.
When the changes were announced, Shell’s chair Sir Andrew Mackenzie argued the changes were necessary to “create value for our shareholders, customers, and wider society.”
While Shell has pushed the argument that it will help the company transition to a net zero, sustainable economy, a primary factor in the move is fulfilling its share buyback pledges.
In July, it announced a $2bn buyback programme and has since said it will return $7bn to shareholders after its sale of Permian assets in the US is completed.
Proxy advisory Glass Lewis, which advises major funds, has recommended shareholders vote in favour of the changes.
Glass Lewis said the simplified structure would allow “an acceleration in distributions by way of share buybacks, as there will be a larger single pool of ordinary shares that can be bought back.”
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown told City PM the move should appeal to shareholders, but won’t change the company’s outlook significantly.
She said: “The proposed new structure which would also eliminate its share classes, should ultimately benefit shareholders as it will streamline the company and make it easier to take difficult steps going forward. But overall a new home in the UK won’t shift sands too much in terms of Shell’s long term outlook. The company is still hugely reliant on the oil price and higher prices will allow it to keep paying down debt. But the level of future returns to shareholders is not certain given the inevitable shift to more renewable energy sources is going to be a costly path to follow for the company.’’
Shell has also announced plans to acquire energy retailer Powershop Australia.