Air Price Boost Reflects Ackman Involvement: Gulley

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July 31 (Bloomberg) -- Mark Gulley, analyst at BGC Partners, examines Bill Ackman's stake in Air Products and what type of change is needed and can be expected for the company. He speaks on Bloomberg Television's "Bloomberg Surveillance."

-- we're talking about your products.

After bill ackman of pershing square, the billionaire activist investor, said he confirmed that he took a 9.8% stake in the company and that makes in the biggest shareholder.

His stake is worth about $2 billion, just over it.

Sara, not too long ago, air products adopted a poison code because of all of this extra unusual share activity.

Let's get straight to mark gulley, bgb robert is.

He worked at air products for a decade.

If bill ackman can push them through and be successful, does that change your mind about it gekk?

The stop was of about 10%, a leg up after the talk about him getting involved in the company.

In my view, if he achieves best in class performance, that is already reflected in a stocks.

Cash conversion cycle, all the accounting stuff that we talk about, can you just go in on a dime and make it praxair?

Not really.

It will take time.

The earnings growth return on capital for products combined is about 500 bits less than praxair.

You just can't change that overnight.

Is that a massive jargon alert?

5% points different between the energy leader and where bill ackman have got to take it.

The lazy, sleepy company.

Come on, they are like philadelphia phillies.

How do you make up that basis point?

It will take time.

You have to improve margins and reduced capital spending.

Those things take time.

They've got the highest backlog in the industry -- $3 billion.

That backlog committed through 20 16. those are commitments to chinese customers.

You cannot just go in and cancel those contracts.

So how do you reduce cap next quickly?

Not easy.

Bill ackman stressed this was a long position.

We reached out to air products.

They have not returned with a comment just yet.

Have you expected to respond?

We get a, we understand that our performance is not up to praxair's levels.

Two, we have steps underway to make that happen.

Three, it will take time.

Investors are not that patient.

They would like to have those performance characteristics at praxair levels now.

I look at this.

What is going to happen next?

They have a lovey-dovey meeting in pennsylvania?

We will get the powerpoint presentation from ackman.

Very detailed presentations.

We will look at that.

We will try to find out what levers he wants to pull.

Cell of small businesses, one of the livers he will pull to try to figure out how long does it take.

Mark, thank you so much.

Mark gulley, bgc partners.

This text has been automatically generated. It may not be 100% accurate.


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