Airgas Rejects Tender Offer

The board of directors for Airgas, a direct merchant of industrial gases and safety gear, unanimously rejected an unsolicited tender offer from Air Products & Chemicals on Feb. 22. Air Products & Chemicals offered to acquire all outstanding common shares of Airgas at a price of $60 per share in cash.

The board, which had rejected an offer from Air Products & Chemicals on Feb. 9 after an unsolicited offer submitted on Feb. 4, also unanimously recommended that Airgas stockholders not tender their shares into Air Products’ offer.

Airgas chairman/CEO Peter McCausland said in a release that the latest unsolicited offer from Air Products & Chemicals “significantly undervalues Airgas and fails to reflect the value of our industry leading position and future growth prospects.”

Since the company’s IPO in 1986, he added, “Airgas has employed a disciplined approach to steadily growing revenue, EBITDA and shareholders equity, and Airgas stock has achieved total shareholder return over that period of more than seven times the return of the S&P 500 index.”

Among other reasons for rejecting the offer is its timing is “extremely opportunistic,” according to the release. “Air Products is trying to obtain the future value of Airgas at a bargain basement price. Airgas and its stockholders are poised to realize significant benefits as the economy emerges from a deep recession, making this precisely the wrong time to sell Airgas.”

In a Feb. 22 memo to Airgas associates, McCausland said the Air Products tender offer is scheduled to expire on April 9, unless extended.

Airgas employs more than 14,000 people in more than 1,100 locations, including branches, retail stores, gas fill plants, specialty gas labs, production facilities and distribution centers. Airgas also distributes its products and services through e-commerce, catalog and telesales channels.

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