Air Products has a significant stake of over $1 billion held by activist firm Mantle Ridge.

• A person familiar with the matter reveals that Mantle Ridge, an activist investor, holds a $1 billion-plus stake in Air Products and Chemicals, an industrial gas supplier.
• Paul Hilal, head of Mantle Ridge, aims to discuss strategic plans and capital allocation with the company's board, according to a source.
• For the second consecutive year, Air Products is lagging behind the S&P 500 in performance.

A source close to the matter reveals that Mantle Ridge owns a significant stake in industrial gas supplier worth over $1 billion.

The source stated that Mantle Ridge, led by Paul Hilal, intends to meet with Air Products' board to discuss strategic plans and capital allocation. Additionally, the activist investor aims to encourage the company to plan for Seifi Ghasemi's succession as Air Products' 80-year-old CEO, the source added.

Since March, Mantle Ridge has been amassing its stake, and this was first reported by The Wall Street Journal.

Despite outperforming the S&P 500 in 2023, Air Products is still lagging behind for a second consecutive year in 2024. The stock has risen by 6.4% compared to the S&P 500's 21% gain. Air Products has a market cap of approximately $63 billion as of Friday's closing.

This year, the company has experienced management changes, with COO Samir Serhan resigning abruptly in July. Ghasemi, however, is one of the oldest CEOs among S&P 500 companies. In fact, Warren Buffett, the CEO of Berkshire Hathaway, is the oldest at 93 years.

The company spokesperson stated that Air Products regularly communicates with the investment community as part of its comprehensive shareholder and analyst outreach program, but declined to provide details on specific engagements.

In 2016, Hilal launched Mantle Ridge, which has since taken on major companies such as railroad businesses and retailers. Air Products, primarily a supplier of chemicals and gases to industrial customers, has recently diversified into other businesses.

Activist pressure should be a concern for any underperforming company, according to 13D's Ken Squire.