Ackman's Pershing Square Capital buys 9.8% in Air Products & Chemicals
31 July 2013
Activist billionaire investor William Ackman's firm Pershing Square Capital Management today said that it has acquired a 9.8 per cent stake worth $2.2 billion in industrial gas company Air Products & Chemicals.
The announcement, made in a regulatory filing, ended weeks of speculation over the investment by Ackman's hedge fund.
In a letter to clients on 8 July, Pershing Square Capital had said that it has built up a major position in an unidentified investment-grade US company.
The stake would have been far bigger had not Air Products adopted the poison pill of preventing a single investor from buying more than 10 per cent in the company.
Pershing Square Capital did not disclose the reasons behind buying a huge stake in the Pennsylvania-based company, but may try a repeat of what he did with railroad company Canadian Pacific Railway.
After buying a 14 per cent stake in Canadian Pacific in 2011, Ackman waged a successful proxy war and bought in a new management team by cornering majority of the board seats.
Commenting on Ackman's investment Air Products said that it maintains an active dialogue with its shareholders and carefully considers their views.
The company has not been contacted by Pershing Square Capital but said that it welcomed new investors and looked forward to engaging with the hedge fund to understand its views.
The company also noted that it has taken significant, proactive steps in recent years to deliver earnings and operating cash flow growth in a very challenging economic environment.
With a market cap of around $22.1 billion and revenues of $9.61 billion Air Products is the world's largest hydrogen and helium producer.
It is also a supplier in industrial, energy, technology and healthcare markets worldwide with a unique portfolio of atmospheric gases, process and specialty gases, performance materials, and equipment and services.
Founded in 1940, the company is also the third-largest seller of safety products and the largest producer of nitrous oxide and dry ice in the US.