Airgas Slaps Air Products

Airgas has rejected Air Products’ “best and final” offer to purchase it for $70 per share. This marks the sixth offer that Airgas’ board has rebuffed. The key line in the press release is this one:
“…the Board unanimously concluded that the $70 per share offer is clearly inadequate and that the value of Airgas in a sale, at this time, is at least $78.00 per share, in light of the Board’s view of relevant valuation metrics.”
What this means is that the three directors that Air Products nominated to Airgas board--and were elected largely by new, deal arbitrage shareholders at Airgas’ annual meeting in September—not only agreed to reject the offer but also recommended a price of $78 per share. This is a blow to Air Products. I will be very surprised if Air Products does anything other than quickly withdraw its offer. How on earth could they raise the bid by $6 or $8 after putting a “best and final” stamp @ $70? UPDATE: Air Products has responded. In the statement, Air Products CEO McGlade talks about how awesome his $70 per share offer is.  "Our offer expires on January 14," he added. In other words, "I'm getting my coat. I'm putting my coat on. Now I'm putting my hat on. I'm walking for the door. I'll turn around if you change your mind. I'm turning the doorknob..."

Author: Alex Tullo

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  1. Airgas must know something we all don’t. I think that $70 offer is amazing, and they should hop all over that. But I know that will never happen considering their history of saying “no!” If I was a shareholder of Airgas I would be selling quicker than anything, because an offer like that is never going to come around again, in my opinion.

    Thanks for the write up, I am interested to see what happens (if anything) by 1/14/11

  2. Airgas is well aware that there is a bigger picture involved here. Air Products is not the easiest kid on the block to get along with. Think of how many vendors and employees will be affected, as well as if the gov will allow these two mega giants to become one. Air Products is borrowing money to attempt the buy. Airgas is a more stable and solid company. Just look at their track record of buying smaller companies in the past to keep their foothold in the forefront. Airgas is a great buy, and they know it, so they want top dollar.

  3. Air Products will fail as in the past when tried to buy BOC. It´s a great company but not prepared do deal this kind of agreement.