Air Products issued the following statement in response to Pershing Square Capital Management’s confirmation of its investment in the company.
The company stated, “Air Products maintains an active dialogue with and carefully considers the views of its shareholders. The company has not been contacted by Pershing Square Capital Management but welcomes new investors and looks forward to engaging with Pershing Square to understand its views.”
“In keeping with its long-standing practice, Air Products will thoroughly review constructive input from shareholders as part of its commitment to increasing shareholder value. Air Products has taken significant, proactive steps in recent years to deliver earnings and operating cash flow growth in a very challenging economic environment,” the statement said, adding, “the company noted that its 2013 total shareholder return of 21.6% through July 24 (the last trading day prior to announcing the adoption of a stockholder rights plan) is more than double that of its industrial gas peer group, and that on a one- and three-year basis total returns have exceeded that of its closest peer (Praxair).”
“As stated on earnings calls in April and July, Air Products continues to actively assess additional steps it can take to further improve operations and increase value to shareholders. That assessment is ongoing and has already resulted in additional cost-reduction initiatives in those regions and businesses facing the greatest challenges from slower market growth.”
Recent actions taken by Air Products include:
Streamlining its portfolio, including selling its European home care business, exiting the polyurethane intermediates (PUI) business and restructuring its market position in photovoltaics
Expanding in key high-growth markets through strategic initiatives such as acquiring Indura, South America’s largest independent industrial gas company
Reducing its cost base by over $150m annually, with recently announced plans for additional cost reductions of approximately $60m per year beginning in the fiscal 2013 fourth quarter
Maintaining a regular program for returning capital to shareholders, including increasing its dividend for the 31st consecutive year and repurchasing $460m of its shares in fiscal 2013 year to date
Building a record $3 billion project backlog, which is over 80% on-site or pipeline business with long-term take-or-pay contract terms; these projects are expected to be immediately accretive to earnings and cash flow as they come on line over the next several years
Air Products remains focused on disciplined capital allocation, cost-effective project execution, driving greater productivity, and delivering on its cash priorities. The company believes it has significant operating leverage in its existing assets, making it well positioned for accelerated earnings growth in an economic recovery.