The attempt by Air Products to acquire Airgas has taken some twists and turns this week.
The week began with Airgas resoundingly rejecting a revised offer from Air Products to purchase the remaining Airgas shares that it does not already own, referring to the offer of $65.50 per share in cash as “grossly inadequate”. Air Products then accused Air Gas of ‘value destructive tactics’.
Air Products is involved in a campaign to gain three seats on the Airgas board, and wants to amend the Airgas by-laws to bring next year’s stockholder meeting forward by nine months to January.
Leading proxy advisory firms have recommended that stockholders vote against this and pledge their support to the current Airgas board.ISS stated in its September 8 report that "this proposal cedes significant control of the negotiation process to the bidder...As the current bid remains below a fair and full price, we do not recommend shareholders support the proposal."
Glass Lewis noted in its September 7 report: "Airgas shareholders should support the incumbent directors on the basis of their solid track record of shareholder value creation and the rigorous analysis of the industry recovery and the company's future prospects.”
Air Products was given some good news Wednesday, however, when the US Federal Trade Commission (FTC) accepted a consent decree that would allow Air Products to acquire Airgas subject to the divestiture of certain assets and permits, and for the closure of the acquisition prior to completion of the divestiture. The assets to be divested relate primarily to Airgas' liquid bulk and on-site supply of atmospheric gases, including production and related assets.
"We are pleased the FTC has accepted the consent decree with respect to our acquisition of Airgas,” said John E. McGlade, Air Products chairman, president and chief executive officer. “All of the principal conditions to completing a transaction with Airgas have been satisfied. The only thing standing in the way of Airgas shareholders receiving a substantial premium for their shares now is the continued refusal of the Airgas Board to engage with Air Products on any level."
What will the next round bring?
Air Products
Founded in 1940, Air Products serves customers in industrial, energy, technology and healthcare markets worldwide with a portfolio of atmospheric gases, process and specialty gases, performance materials, and equipment and services. It has built strong positions in key growth markets such as semiconductor materials, refinery hydrogen, home healthcare services, natural gas liquefaction, and advanced coatings and adhesives.
In fiscal 2009, Air Products had revenues of $8.3 billion, operations in over 40 countries, and 18,900 employees around the globe.
Airgas
Airgas is the largest US distributor of industrial, medical, and specialty gases, and hardgoods such as welding equipment and supplies. It is also the largest US producer of nitrous oxide and dry ice, the largest liquid carbon dioxide producer in the Southeast, and a leading distributor of process chemicals, refrigerants, and ammonia products.
