DOW JONES NEWSWIRES
The Food and Drug Administration said it warned Airgas Inc.
(ARG) about medical-gas manufacturing operations that violated
pharmaceutical regulations.
The setback comes during what may be the final chapter of a
prolonged takeover battle between the company and larger rival Air
Products & Chemicals Inc. (APD). On Thursday, the suitor
boosted its offer to $70 a share from $65.50 a share, calling the
raised bid its "best and final" offer.
Airgas had said it wouldn't accept an offer below $78 a share,
but the company released correspondence Monday in which three of
its independent directors said they did not agree with that
view.
In a letter dated Dec. 1 and posted to the FDA's website
Tuesday, the agency said violations included the company failing to
sufficiently expand an investigation of a contaminated nitrogen
cylinder and filling batches of medical gas drug products without
completing production records. It described as inadequate the
firm's responses to the problems.
The warning letter stemmed from July inspections of an Airgas
facility. An Airgas spokesman wasn't immediately available to
comment.
Airgas has benefited of late as demand has recovered from
woefully low levels during the economic downturn. In October, it
reported its second-quarter profit jumped 22% as revenue rose.
Meanwhile, Airgas and Air Products are embroiled in legal
proceedings over whether Airgas's shareholder-rights plan, commonly
known as a poison pill, is valid. If Air Products can't get the
pill dissolved, its tender offer is effectively moot.
Airgas shares were up 0.6% at $63.85 in recent trading. The
stock has gained 34% this year.
-By Matt Jarzemsky, Dow Jones Newswires; 212-416-2240;
matthew.jarzemsky@dowjones.com