Hedge fund manager William Ackman unveiled his biggest bet ever on Wednesday, a $2.2 billion play on Air Products that the billionaire trader kept secret for two months.

The activist investor's Pershing Square Capital Management owns 9.8% of the industrial gas maker, making it the company's biggest shareholder. Pershing Square might have bought even more, but Air Products adopted a "poison pill" defense to prevent a takeover after some on Wall Street began speculating that the company might be in Ackman's sights.

Speculation mounted earlier this month that Ackman, who tends to make only a few concentrated bets at a time, was laying the groundwork for something big when he set out to raise as much as $1 billion to invest in a company he declined to name.

In a filing with the Securities and Exchange Commission on Wednesday, Ackman said he began buying Air Products stock in early June and believes it to be "undervalued" and an "attractive investment." He did not finish buying shares until Tuesday.

As chemical makers and other manufacturers have moved overseas operations back to the United States due to cheap oil and natural gas from the U.S. shale boom, demand for Air Products' gases has surged. Quarterly profit has more than quadrupled from the first quarter 2009, to $278.3 million.

Securities laws require investors to disclose the acquisition of 5% or more of a publicly traded U.S. company. But hedge fund managers have found ways to keep their bets quiet.

Ackman relied on seven holding companies Pershing Square incorporated in Delaware to do the Air Products buying, according to the SEC filing. Most of the entities were incorporated in early June, with one incorporated in July.

Over the years, Ackman has used similar entities to accumulate shares in target companies, such as for a big stake he bought in Fortune Brands in 2010.

Air Products, whose rivals include Praxair Inc, France's Air Liquide SA and Germany's Linde AG, said in a statement that it has not been in touch with Ackman but said it looks forward to engaging with Pershing Square to understand its views.

Apparently, the Air Products board realized that Ackman - or someone - was interested in the company, in light of heavy stock buying; it adopted a "poison pill" takeover defense.

"The board was paying attention," said Keith Gottfried, a partner at law firm Alston & Bird. "They acted quickly and thoughtfully to protect their shareholders and create a little bit of breathing room."

One mystery is how Ackman managed to keep the investment under wraps even as investors were discussing his plan to raise money.

In a letter to investors, seen by Reuters, Ackman offered a fee cut in exchange for locking up their money for three years. The offer suggested he might need time for his new investment to play out.

At least one institutional investor, the Arkansas Teacher Retirement System, which has $185 million with Ackman's fund, agreed to let some of its money be locked up for even longer than three years, according to an official with the pension fund.

Ackman was silent about his target, even with potential investors, sparking some grousing that it was a "big ask" at a time when pension funds, in particular, want more transparency.

Under securities laws, an investor has 10 calendar days to disclose the acquisition of 5% or more of a publicly traded U.S. company.

Over the years, hedge fund managers, especially those pursuing activist strategies, have become skilled at finding ways around the regulatory requirement.

"The fact this didn't leak shows that he's credible and relevant in this industry and is skillful in keeping his cards very close to his vest," Gottfried said.

Investors can delay the disclosure process by requesting "confidential treatment" from the SEC, under the argument that disclosure might interfere with a business strategy.

Pershing Square has made use of this argument. In April it filed an updated quarterly holdings list for the 2012 fourth quarter, revealing that it had 5.9 million shares of Mondelez International. The fund reported the rest of its 2012 fourth-quarter holdings in February.

Securities law experts said it is likely that Ackman deployed a similar strategy in building his Air Products stake.

For Ackman, the Air Products disclosure comes at a critical time, as he rides a $1 billion short bet against Herbalife. Reuters reported on Tuesday that Pershing Square had incurred at least a $300 million loss on its bearish bet on the nutritional drink and supplement company.

On Wednesday, as Ackman was watching the Air Products share price rise, he was losing more money on Herbalife amid news that billionaire investor George Soros, a sometime tennis partner of Ackman's, had taken a large long position in Herbalife. Carl Icahn, another billionaire investor and long-time rival of Ackman, also holds a large long position in Herbalife, which Ackman says is a pyramid scheme.

What Ackman may like about Air Products is that the company has few rivals, and its industrial gas business has lucrative long-term contracts. However, in recent months it has been hit by high exposure to sluggish growth in Europe, and analysts say it should divest its non-core gas businesses.

Those non-core businesses account for roughly 20% of the company's sales, including a chemicals unit and one that caters to computer chip makers.

Two years ago, Air Products attempted a hostile takeover of smaller rival Airgas for $5.9 billion. Ironically, Airgas used a "poison pill" to ward off Air Products.