Industrial gas producer Air Products & Chemicals Inc named Seifi Ghasemi as chief executive, amid pressure from Bill Ackman to overhaul its management, sending its shares up 8 percent to a record high.
Ghasemi, who resigned as CEO of Rockwood Holdings Inc to accept his role in Air Products, is known for successfully executing deals.
"His hiring could signal that APD may be open to divestitures," Oppenheimer & Co analyst Edward Yang said in a note to investors.
Under Ghasemi, Rockwood recently sold its ceramics business and is in the process of selling its paint pigment unit to Huntsman Corp. The company also recently bought a 49 percent stake in Talison Lithium Pty Ltd for $475 million.
Activist investors have called Air Products, one of the largest industrial gas companies, to divest volatile units.
Suntrust Robinson Humphrey analyst James Sheehan, however, said divesture may not be as large a part of Ghasemi's strategy as it was at Rockwood. "I think it will be more about operational execution and discipline on capital spending."
Activist investor Ackman has been saying Air Products was undervalued and was underperforming its peers. His Pershing Square Capital Management is the largest shareholder of the company with a 6.7 percent stake.
Ackman has pushed for a new management at Air Products, saying hiring the right CEO can double the stock's price in the next few years.
Air Products announced the resignation of CEO John McGlade last September and appointed three independent directors, including Ghasemi.
"I think it was incorrectly presumed (in September)... that he (Ghasemi) wasn't going to become the CEO, even though he was the best candidate," UBS Analyst John Roberts said.
It is safe to assume he is relatively well familiar with Air Products' business, Roberts said.
Pershing Square's spokesman declined to comment on Wednesday's announcement.
Ghasemi was a senior executive at industrial gas company BOC Group, a company that Air Products unsuccessfully attempted to take over in 2000. BOC was later acquired by Linde AG.
The mechanical engineer from Stanford University, known for his industry knowledge, has also worked with British industrial company GKN Plc.
Ghasemi, currently on the boards of battery maker EnerSys and specialty chemicals company Chemetall GmbH, will receive an annual base salary of $1.2 million, Air Products said in a regulatory filing on Wednesday.
Air Product's shares rose 7.5 percent to close at $130.72, after touching a high of $131.48, on the New York Stock Exchange on Wednesday.
Shares of Rockwood, which appointed Chief Financial Officer Robert Zatta acting CEO, were down 3.5 percent at $73.31.
(Editing by Joyjeet Das)