Tuesday, packaged gas distributor Airgas, Inc. (ARG), said its board of directors unanimously rejected the unsolicited acquisition bid from Air Products & Chemicals, Inc. (APD) as the offer significantly undervalued the company and is not in the best interests of its stockholders.
Terming the proposal "opportunistic," Airgas Board rejected Air Products' latest bid of $5.1 billion or $60 per share that follows two earlier offers including exchange of stock. The last cash and stock offering in October valued Airgas at $62 per share.
In its earlier rejection of the cash and stock offer, Airgas pointed out that Air Products stock had historically underperformed Airgas stock, prompting Air Products to now make an all cash bid of $60 per share.
In a letter to Air Products President and CEO John, Airgas Chairman and CEO Peter McCausland said his company's stock has consistently performed better than Air Products with a stock price appreciation of 75% over the last five years and 471% over the last ten years, compared with 25% and 139% for Air Products' stock respectively.
McCausland also pointed out that Airgas' packaged gas business in the U.S. differed significantly from Air Products' business in Europe. He reminded Air Products that they had exited the U.S. business just eight years ago, "by selling it to Airgas when it was in disarray."
Air Products' financial advisor in the matter is J.P. Morgan Securities Inc. and its legal advisors are Cravath, Swaine & Moore LLP and Arnold & Porter LLP.
BofA Merrill Lynch and Goldman, Sachs & Co. are serving as financial advisors, and Wachtell, Lipton, Rosen & Katz is serving as legal counsel to Airgas.
ARG closed Monday's regular trading at $61.35, up $0.80 or 1.32%, on a volume of 3.77 million shares. APD closed at $67.95, down $0.40 or 0.59%, on a volume of 3.74 million shares. Both shares are traded on the NYSE.
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