(Adds Air Products comment about Airgas lawsuit, updates stock
quotes)
Nominees backed by Air Products & Chemicals Inc. (APD) won
all three board seats up for grabs at Airgas Inc.'s (ARG) annual
shareholder meeting, while proposed bylaw changes received majority
support but not the two-thirds support Airgas believes is necessary
for them to take effect.
The result means the seven-month battle regarding Airgas's
future will continue. Air Products went public in February with its
$5.1 billion takeover offer after being rebuffed by Airgas. The
offer has since been raised twice and currently sits at $5.48
billion, or $65.50 a share.
Airgas still believes that price falls far short of the
company's value and said Wednesday in a statement disclosing the
vote results that the latest bid "grossly undervalues" the
company.
It added it was "disappointed with the outcome" of the vote.
"Airgas shareholders have provided a clear mandate to negotiate
a transaction, and we appreciate their support," said Air Products
Chairman and Chief Executive John McGlade. "We stand ready to
negotiate immediately, and call on the Airgas board to respect the
will of its shareholders. Further delay serves no purpose."
Air Products had said it planned to walk away from the buyout
effort if Airgas holders didn't back its nominees and bylaw
proposals.
Airgas, the largest U.S. distributor of industrial, medical and
specialty gases, believes that a two-thirds threshold was needed
for the bylaw changes proposed by Air Products under Delaware law.
It filed a lawsuit in Delaware Chancery Court after the meeting to
invalidate the shareholder vote.
Air Products late Wednesday called the suit "totally without
merit." "Airgas shareholders had a chance to speak today and
provided a clear mandate to negotiate a transaction; their will
should be respected," the company added.
The biggest impact of the proposed bylaw changes would be
holding another annual meeting in January, at which another
one-third of Airgas's board spots would be up for a vote.
Air Products ran a three-person slate for Wednesday's meeting,
hoping that their election would result in a friendly takeover
deal.
Proxy advisers were split on whether Airgas holders should vote
for Air Products' nominees and bylaw proposals.
Over the weekend, financial advisers of both companies had
discussions trying to seek common ground. Air Products said it told
Airgas it was willing to negotiate a price, according to a filing
with the Securities and Exchange Commission. But Airgas said Air
Products didn't provide a revised offer over the weekend's
discussions.
Airgas shares were at $67.07, down 9 cents, in after-hours
trading after closing up 3.6%, while Air Products added 19 cents to
$81.57. Its shares closed up 1.5%.
-By Kevin Kingsbury; Dow Jones Newswires; 212-416-2354;
kevin.kingsbury@dowjones.com