Pershing Square Capital Management (New York), run by activist investor Bill Ackman, has acquired a 9.8% stake in Air Products, according to regulatory filings. The firm says in the filing that Air Products ¡°is undervalued and is an attractive investment.¡±

Air Products said in a statement Wednesday that it has not been contacted by the hedge fund ¡°but welcomes new investors and looks forward to engaging with Pershing Square to understand its views.¡± Air Products last week adopted a stockholder rights plan, or poison pill, noting ¡°unusual and substantial activity¡± in its shares. The plan would be triggered if a person or group acquires 10% of the company¡¯s common stock.

Pershing Square started acquiring its stake in Air Products in early June, according to filings. Through 30 July, the firm says it has purchased an aggregate of 20.5 million shares of Air Products for $2.03 billion, including brokerage fees. Air Products was trading at $109.27 at 1 pm on 31 July, up 3.5% for the day. Pershing Square¡¯s stake would be valued at $2.24 billion at midday price on 31 July, about 10% above its cost basis.

Pershing Square says that it intends to ¡°engage in discussions with [Air Products], management, the board of directors, other stockholders, and other persons that may relate to governance and board composition, management, operations, business, assets, capitalization, financial condition, strategic plans, and the future of the [company].¡± Pershing Square also notes that its actions could include solicitation of proxies and that it would review the investment ¡°on a continuing basis.¡±

Air Products defended its recent record today, noting that it has ¡°taken significant, proactive steps in recent years to deliver earnings and operating cash flow growth in a very challenging economic environment.¡± The company says it continues to actively assess additional steps it can take to 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,¡± the company says. Air Products says that year-to-date total shareholder return of 21.6% through 24 July, the last trading day prior to announcing the adoption of a poison pill, 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 Praxair, its closest peer.

Pershing Square said earlier this month that it was raising $1 billion to invest in a large-capitalization, investment-grade US company, according to Bloomberg News.