Pershing Square Target Announces CEO Exit

Sep 26 2013 | 10:52am ET

Pershing Square Capital Management's latest activist campaign has already produced a major shakeup at its target company.

Air Products and Chemicals, which the William Ackman-led hedge fund took a 9.8% stake in this summer, said today that its CEO would retire next year and that it would add three directors to its board. The changes were backed by Pershing Square.

CEO John McGlade will step down in 2014 and remain chairman of the company for a transition period. A newly-formed committee of the board will seek his replacement.

"As I approach age 60 and the board plans for my retirement, the actions our board is announcing today will ensure an orderly leadership transition," McGlade said. "We have had a constructive dialogue with Pershing Square, our largest shareholder, and are pleased they are supportive of the actions our board is announcing today for the benefit of all Air Products shareholders."

"We invested in Air Products because it is a great business in an industry with excellent long-term prospects," Ackman said. "In recent weeks, we have been delighted to get to know John and the rest of the board, working with them on their mission of continuous improvement and long-term shareholder value creation."

None of the three new seats will go to Pershing Square, which pledged to back management's board slate next year. Three current directors will retire before that annual meeting.

New York-based Pershing Square created a $1 billion single-stock fund to finance half of its investment in Air Products, a Pennsylvania-based industrial-gas producer. Ackman has said that Air Products trades at a lower multiple than its closest competitor.


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