Air Products Shares Top $307 as Proxy War of Press Releases Goes On

— Jeff Ward, Lehigh Valley News Briefs

Air Products has been getting a lot of attention recently, good and bad.

The maker of industrial gases is in what’s called a “proxy battle” with an activist shareholder, Mantle Ridge.

New York City-based Mantle Ridge wants to shake up the company’s board and management, and move on from Chairman, Chief Executive and President Seifi Ghasemi, who is 80.

I find Ghasemi to be interesting because while some CEOs run from talking about their company’s share price, sometimes he’s blunt about it. In February 2024, he said the shares should have been trading at $369, based on a multiple of its forecast for the fiscal year.

That was a lot more than the current price at the time of about $229. Ghasemi blamed short sellers (who bet on shares to decline).

Even ignoring the investment in clean energy, he said the shares should have been valued at $300 (this was almost a year ago).

As of the close today, the price was $307.96, and a little higher in late trading. Mantle Ridge says the company could be trading at $425, a number that gets the attention of shareholders.

Disclosure: I own shares of Air Products. Yes, I am fully stocked up on popcorn for this show.

Air Products contends it is moving forward and doesn’t want interference from Mantle Ridge, which owns about $1.3 billion of the company’s stock (NYSE:APD).

That sounds like a lot, and it is, but it is only about 2% of the total. Mantle Ridge needs more than that to elect its four board nominees and install new management. Thus the publicity blitz.

The company and Mantle Ridge, along with others, have been putting out frequent press releases as both sides make their case to win the proxy votes of shareholders. Board members will be decided at Air Products’ Jan. 23 annual meeting. Votes are known as proxies, so this is a proxy battle.

Mantle Ridge has questioned management and Ghasemi’s focus on investing in clean energy — “green hydrogen” which is made using renewable electricity to split water (H2O) into its components, hydrogen and oxygen. The process does not generate carbon dioxide emissions. CO2 is a greenhouse gas that has been linked to climate change.

Ghasemi says that the world will need clean fuel for heavy transportation and industry, such as steelmaking. Air Products will have a “first mover” advantage.

Mantle Ridge has the support of proxy advisory firms; these businesses advise pension funds, mutual funds and other big investors on how to vote. Funds hold many stocks and can’t spend a lot of time analyzing all of them, thus they retain advisers.

This morning, Egan-Jones came out in support of Mantle Ridge; here is their statement, but note, as summarized by Mantle Ridge.

Earlier Mantle Ridge has touted support from Institutional Shareholder Services and Glass Lewis. All that material can be found at this website, which Mantle Ridge calls “Refreshing Air Products.”

Air Products meanwhile says any refreshing can and will be done by current management. It has unleashed its own volley of statements from Upper Macungie Township. The one sent yesterday tells shareholders they have a choice:

ACHIEVE STABILITY, GROWTH, AND LONG-TERM VALUE CREATION WITH AIR PRODUCTS’ FIT-FOR-PURPOSE BOARD

OR

RISK LIMITED GROWTH, LONG-TERM VALUE DESTRUCTION, AND AN UNCERTAIN FUTURE WITH MANTLE RIDGE’S NOMINEES WHO HAVE STALE OR INFERIOR EXPERIENCE AND LACK ANY GO-FORWARD PLAN

And there’s more, it’s all at this link to the statement, and this website.

It will all be settled, maybe, at the annual meeting of shareholders on Jan. 23.