Mantle Ridge nominates new board for Air Products, pushes for new CEO

Linde

19/11/2024 11:30

* 
      Mantle Ridge nominates its CEO, 8 others to bring
independent
voices, industry experience
    

        * 
      Mantle Ridge sees ex-Linde executive Eduardo Menezes as
good
candidate for CEO
    

        * 
      Air Products' stock price up 15% on activist investors'
push for
changes 
    

  
    By Svea Herbst-Bayliss
       NEW YORK, Nov 19 (Reuters) - Mantle Ridge has nominated
nine directors to replace the board at Air Products and
Chemicals  APD.N , with the activist investor pushing the
industrial gases maker to name a new CEO, shift its capital
allocation and abandon riskier projects.
    The nominees include Paul Hilal, Mantle Ridge's founder and
CEO, and Dennis Reilley a former executive at rival gases maker
Linde who has been identified for a possible leadership role,
according to documents seen by Reuters and sources familiar with
the matter.
    The others are executives with experience in energy,
decarbonization, finance and mergers and acquisitions who have
served on public company boards and are independent.
    Mantle Ridge wants to replace the company's CEO and has
named Eduardo Menezes, a former executive vice president for
Europe, Middle East and Africa at Linde, as a suitable
candidate. Menezes is not one of Mantle Ridge's board
candidates.
    Air Products did not immediately respond to a request for
comment and has not commented previously on Mantle Ridge's
campaign.
    Mantle Ridge's nominations come one day after Air Products
said it would replace two directors retiring at next year's
annual meeting.
    One of the company's newcomers will be Bhavesh "Bob" Patel,
a former CEO of chemical companies W.R. Grace and LyondellBasell
 LYB.N , who has been mentioned as a possible replacement for
Air Products' current chief executive officer.
    Air Products is valued at $73 billion, and its stock price
has climbed 15% since Mantle Ridge's roughly $1 billion stake in
the company was revealed in early October. A second activist
investor, D.E. Shaw, last month signaled it is supporting Mantle
Ridge's efforts instead of pressing ahead with its own board
challenge.
    Mantle Ridge is pushing the company to improve its capital
allocation and to find someone to replace Seifi Ghasemi, the
octogenarian chief who has been CEO for a decade.
    Barclays analysts wrote on Monday that investors would
likely prefer Mantle Ridge nominee Dennis Reilley as board
chairman and Eduardo Menezes as CEO, given the pair's experience
at an industrial gases company. The report also says Patel has a
solid track record running commodity and specialty chemical
businesses.
    Menezes did not respond to a request for comment.
    For Hilal, the campaign at Air Products is the second time
he is pushing for changes at the Allentown,
Pennsylvania-headquartered company. As a partner at Bill
Ackman's Pershing Square Capital Management, Hilal in 2014
helped identify Ghasemi as the company's CEO and put new
directors on the board.
    Investors will vote early next year on who will sit on the
company's board unless the two sides reach a compromise
beforehand. Last year's annual meeting took place in January. 
    Hilal often begins a proxy fight by nominating a large
number of board candidates, sending a powerful warning to the
company, and then whittles his list down later as he and the
company hold discussions. Mantle Ridge has told the company that
even though it has nominated nine directors, it remains ready to
engage in a collaborative process, the sources said. 
    Since spinning out of Pershing Square to launch his own
firm, Hilal has invested in a small number of companies,
including CSX  CSX.O , Aramark  ARMK.N  and Dollar Tree
 DLTR.O . At each company, he appointed new chief executives.
    

 (Reporting by Svea Herbst-Bayliss; Editing by Sonali Paul)
 ((svea.herbst@thomsonreuters.com; +617 233 2138; Reuters
Messaging: svea.herbst.thomsonreuters.com@reuters.net))