Air Products Stock Slips on Activist Pressure; AGM Looms

Air Products and Chemicals (APD) shares have taken a tumble in recent weeks, with the stock declining by 13.2% in December 2024. The drop can be attributed to the involvement of activist hedge fund Mantle Ridge, which has proposed significant changes to the company's board and leadership. As the annual general meeting (AGM) approaches on January 23, 2025, investors are eagerly awaiting the outcome of this battle for control.

Mantle Ridge, which owns 1.8% of Air Products' stock, has proposed four independent candidates to the Board, including former Praxair CEO Dennis Reilley, who they hope will take a leadership role, and industry veteran Eduardo Menezes as CEO. The hedge fund has also sent a letter to Air Products highlighting the company's underperformance and management problems, urging investors to vote for its nominees at the AGM.

Air Products' Board has responded by criticizing Mantle Ridge's track record, arguing that its history of value destruction, contradictory and disorganized actions, and pursuit of company control without any serious plan did not provide any basis for engagement. The Board also contended that Menezes had never served as a CEO and that Reilley hadn't served in an operating role in over 17 years or on a board of directors in over five years.



The ongoing battle between Mantle Ridge and Air Products' management and board has created uncertainty and concern among investors, leading to a significant drop in the company's stock price. The market data shows a clear correlation between the public disagreement and the decline in Air Products' stock price.



Analysts have maintained a "buy" recommendation for Air Products, with 21 analysts providing opinions. Despite the short-term volatility, analysts remain optimistic about the company's long-term prospects. As of January 4, 2025, Air Products' stock price is $285.015, down from its 52-week high of $337.0 but above its 52-week low of $212.24. The stock's 50-day average is $313.9482, and the 200-day average is $278.8812, indicating a recent decline in the stock price.

As the AGM approaches, investors will be closely watching the developments between Mantle Ridge and Air Products' board. The outcome of this battle could significantly impact the company's strategic direction and shareholder value. While the uncertainty may contribute to short-term volatility, the long-term prospects of Air Products remain promising, given its strong financial performance and growth potential.