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Mergers And Acquisitions: Airgas Rejection Sets Stage For A Showdown

by Alexander H. Tullo
September 13, 2010 | A version of this story appeared in Volume 88, Issue 37

Airgas has once again declined a sweetened takeover offer from Air Products & Chemicals. With Airgas’ board of directors refusing to negotiate, the annual meeting of the company’s shareholders later this week promises to be the climax of the takeover drama, after which Air Products is threatening to walk away from the deal.

Air Products’ new offer is $65.50 per share. In February, the company launched a hostile takeover of Airgas for $60.00 per share. In July, it raised its bid to $63.50.

Airgas CEO Peter McCausland repeated his argument against Air Products’ entreaties in rejecting the latest offer, saying it “continues to grossly undervalue Airgas.”

At Airgas’ annual meeting, scheduled for Sept. 15, Air Products will try to get elected three directors it has nominated to the Airgas board and force Airgas to hold its next shareholders’ meeting in January, rather than in June as it currently plans.

“If Airgas shareholders do not elect these three nominees and approve all of our proposals, we will conclude that shareholders do not want a sale of Airgas at this time—and we will therefore terminate our offer and move on,” Air Products CEO John E. McGlade says.

Airgas has promised its shareholders that it will “explore all available alternatives” to the offer if they reject Air Products’ proposal to push the next meeting up to January. “In this regard, the Airgas board has made clear on numerous occasions its willingness to engage in negotiations that it believed would result in appropriate value for Airgas stockholders,” the company says.


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