Air Products (APD) said it will take its $5.1 billion takeover
offer for rival Airgas Inc. (ARG) to their shareholders, saying the
refusal by Airgas' board to discuss its bid "has left us with no
alternative."
Air Products said it would take "all necessary steps" to
complete the deal, and urged Airgas shareholders to "send a clear
message to their board" that they want one. Airgas on Tuesday had
rejected Air Products' bid, saying it significantly undervalues the
company and isn't in the best interest of shareholders.
"We respect (Airgas Chief Executive) Peter McCausland and
greatly admire the company he founded and matured, but we
fundamentally disagree with him on achievable standalone value and
do not believe his approach is in the best interests of the owners
of the other approximately 90% of Airgas shares," Air Products said
in a statement.
Air Products has said it is willing to enter into a proxy
contest in order to succeed, but Airgas is seen as having
"significant defenses" to a hostile takeover, according to
analysts.
Air Products officials weren't immediately available for comment
Thursday morning.
A merger would create the largest industrial-gas maker in North
America by revenue. Air Products has annual sales of $8.3 billion
and sells gases such as argon, hydrogen and oxygen to industrial
plants. It previously tried to buy its smaller rival, which serves
a different market segment and has a retail customer base, by
offering cash and stock with an "implied" value of $62 a share in
December. The offer made public last week was $60 in cash.
Shares of Air Products and Airgas closed Wednesday at $68.22 and
$61.31, respectively, and were inactive premarket.
-By Nathan Becker, Dow Jones Newswires; 212-416-2855; nathan.becker@dowjones.com;