Pershing Square Puts $2 Billion Into Latest Activist Effort

Jul 31 2013 | 10:02am ET

Pershing Square Capital Management founder William Ackman is unbowed by the growing losses he's suffered on his activist campaign against nutritional supplements company Herbalife, announcing the hedge fund's largest-ever investment today.

New York-based Pershing Square bought up a 9.8% stake in Air Products & Chemicals, a Pennsylvania-based industrial-gas producer. The hedge fund about $2.05 billion for the shares, which are up 30% this year.

Air Products is the target of the $1 billion single-stock fund Pershing Square announced earlier this month. Countering reports that the hedge fund was having difficulty raising money for that vehicle, Ackman told Bloomberg News that Pershing Square raised "more than we could spend." Pershing Square's existing hedge funds also invested in the stake.

Ackman's move sets up a potential battle with Air Products, which last week adopted a poison pill provision to prevent any investor from gaining too much control. The company said it "looks forward to engaging with Pershing Square to understand its views."

Ackman has yet to make his demands for Air Products clear. But in fundraising documents for the single-stock special-purpose vehicle, he noted that the company he had in mind trades at a lower multiple than its closest competitor.

"The company has lower margins than a lot of its peers," SunTrust Robinson Humphrey analyst James Sheehan told Bloomberg Radio. "He may push for them to divest some of their non-core businesses." Sources told The Wall Street Journal that Ackman does not plan to push for a break-up of the company.

In Depth

Related-Company Fees: Normal Industry Practice or Conflicted Compensation?

Nov 11 2015 | 4:23pm ET

Regulatory agencies as well as investors are increasingly exploring whether certain...


Ferrari Roars in Wall Street Debut

Oct 21 2015 | 4:28pm ET

Shares of supercar maker Ferrari jumped as much as 15 percent to a high of nearly...

Guest Contributor

Private Debt - What is the Opportunity?

Nov 11 2015 | 3:28pm ET

In this contributed article, Rob Allard, founding partner of Firebreak Capital...


Editor's Note

    Oct 21 2015 | 10:41am ET

    One of the most unique charity benefits in the hedge fund industry, A Leg To Stand On's (ALTSO's) Hedge Fund Rocktoberfest - NYC, raised nearly $500,000 last Thursday thanks to the generous support of major sponsors and nearly 1,400 attendees from the Tri-State finance, business and hedge fund communities. Read more…