This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Change Began at Air Products Before Ackman Entered

Stocks in this article: APD JCP HLF ROC EMR

NEW YORK ( TheStreet) -- Pershing Square Capital Management was instrumental in driving a shakeup of the management and board ranks at Air Products (APD), however, sources tell TheStreet that change was underway well before the Bill Ackman-run fund took a $2.2 billion stake in the under-performing chemicals manufacturer.

On Thursday, Air Products named three new independent directors to its board and said current CEO John E. McGlade would retire in 2014. Those changes were accepted by Pershing Square and the fund will now vote in favor of directors nominated by Air Products at its 2014 annual shareholder meeting.

Air Products named Seifi Ghasemi, CEO of Rockwood Holdings (ROC), Edward L. Monser, COO of Emerson Electric (EMR) and Matthew Paull, a former CFO of McDonalds (MCD) to replace three directors that will retire starting in 2014. The company also said it will begin a CEO search to replace McGlade upon his retirement in 2014.

The board overhaul and pending management change at Air Products were taken as a big win for Ackman, after a large investment in J.C. Penney (JCP) left Pershing with significant losses and sharp criticism by business luminaries such as Starbucks (SBUX) CEO Howard Schultz.

While Pershing did help to impart change at Air Products and was characterized by sources close to the matter as driving a helpful dialogue, the company was already in the process of making many of the changes announced on Thursday.

Air Products had hired executive search firm Heidrick & Struggles on retainer to find replacements for board directors reaching their retirement age before Pershing disclosed a 9.8% stake in the company in July, according to one source familiar with the situation.

Another source said John E. McGlade was likely already considering a retirement, after decades with the company that culminated in his appointment as CEO in 2007 and chairman in 2008.

"None of this was a tectonic shift," that source said of Pershing's impact on Thursday's announced management and board change.

" Ackman was pushing on an open door," another source said.

Air Products and Pershing Square declined to comment for this article.

Pershing Square unveiled a $2.2 billion stake in Air Products in late July, the biggest single investment in the hedge fund's history. In a July 31 SEC filing, the fund said it intended to engage with the company about its governance, board composition, and management, in addition to strategic discussions.

Prior to Pershing's disclosure, Air Products enacted a so-called "poison pill" amid heavy buying activity in the company's shares by a single investor. At around that time, Ackman also publicly said Pershing was poised to unveil its next big investment, after taking a highly public and controversial short position in supplements seller Herbalife (HLF) last December.

All sources who spoke with TheStreet said Pershing's discussions with Air Products centered on board and management change and not the company's operations or assets. Those sources characterized discussions as amicable and productive.

In the wake of a highly critical campaign for change at J.C. Penney, one source said Pershing Square may have chosen to adopt a less aggressive posture in his newest activist investment.

"I think the bad Ackman could have showed up, but the good Ackman showed up in this case," that source said.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,356.87 +288.00 1.69%
S&P 500 2,012.89 +40.15 2.04%
NASDAQ 4,644.3120 +96.4780 2.12%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs