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DE Shaw makes three Air Products’ director nominations

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Multi-strategy hedge fund firm DE Shaw has nominated three directors to the board of Air Products and Chemicals after building a $1bn stake in the business, and is urging the company to return to its historically successful business practices, according to a report by NBC.

The moves comes shortly after another activist investor, Mantle Ridge, disclosed its own $1bn holding in the $71bn company. Both hedge funds are concerned about succession planning and executive compensation under current CEO Seifi Ghasemiat who, at 80, is one of the oldest CEOs in the S&P 500.

DE Shaw’s letters to the board, made public on Thursday, revealed that private engagement efforts with the company had been largely ignored and marked by “an apparent lack of urgency.” In response, the hedge fund is moving to nominate three directors to the board, including Scott Sutton, former CEO of Olin, who is seen as a potential candidate for the CEO position.

DE Shaw also criticised Air Products’ approach to major infrastructure projects, expressing concern that the company had embarked on multi-billion-dollar hydrogen initiatives without securing guaranteed cash flows through offtake agreements — deals that typically ensure a stable revenue stream. DE Shaw argued that this shift in strategy has contributed to Air Products’ recent underperformance compared to its historical average and industry peers, like competitor Linde, which has pursued less risky projects with offtake agreements.

While DE Shaw is currently pushing for the addition of three directors, Mantle Ridge, led by Paul Hilal, is considering launching a proxy fight for control of the entire board.

Air Products has declined to comment on either activist’s engagement.

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