London stocks struggled at the start of the week, as losses for pharmaceutical stocks vied with a stronger energy sector.

Shares of Royal Dutch Shell
RDSA,
+1.19%

RDS.A,
+1.23%

rose 2% after the energy company proposed a restructuring that will eliminate a complex structure of B shares. It will also align its tax residency in Europe, doing away with the Royal designation, so the company will be called just Shell, and a shareholder vote is scheduled for Dec. 10.

“The company believes that the simplification of the corporate and shares structure will increase the efficiency of certain financial operations such as equity raises, demergers and buybacks. The latter is a particularly important point because, until now, Shell has been buying back only B shares,” said Jefferies analysts Giacomo Romeo and Michael Schwartz, in a note to clients.

The pool of liquidity of shares available for buybacks will increase after the proposed restructuring, they added.

The Jefferies analysts said the restructuring could have a bearing on a Dutch court ruling over Shell’s carbon emissions.

“At 3Q results, Shell introduced a new Scope 1 & 2 target of -50% emissions by 2030, greater than the 45% Scope 1 & 2 reduction called for by Milieudefensie, but the group also is pressuring Shell to reduce Scope 3 emissions by 45% by 2030,” said the analysts.

For investors, any restructuring is overshadowed by the fact that Shell’s long-term growth story “still rests heavily on the oil price,” said Laura Hoy, equity analyst at Hargreaves Lansdown, in a note to clients. Higher oil prices are keeping the company’s “group’s cash coffers topped up,” aiding it with debt and giving it a source to boost shareholder returns.

“However, with the inevitable shift to more sustainable energy picking up steam, we suspect the need to invest in greener operations will keep a lid on what the group can pass on to shareholders,” said Hoy.

Meanwhile, the FTSE 100
UKX,
-0.18%

was flat at 7,345.78, while the British pound
GBPUSD,
+0.28%

fetched $1.3433 versus the previous close of $1.3409.

The biggest gainer in the FTSE 100 was Avast
AVST,
+7.16%
,
which rose 7% after NortonLifeLock’s
NLOK,
-3.09%

recommended merger with the Czech multinational cybersecurity software company was cleared by U.S. antitrust authorities.

The biggest declining stock was that of retailer B&M European Value Retail
BME,
-3.64%
,
which fell 5%. The company announced the offering of £250 million in senior secured notes on Monday.

In the midcap FTSE 250
MCX,
+0.32%
,
Avon Protection
AVON,
+19.50%

climbed 19%, and the largest midcap decliner was Kainos Group
KNOS,
-8.58%
,
which fell 9%.

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