Airgas Inc. (ARG) rejected rival Air Products & Chemicals Inc.’s (APD) $5.1 billion takeover offer, saying it significantly undervalues the company and isn’t in the best interest of shareholders.
Airgas’s shares slid 1.3% to $60.55 in after-hours trading Tuesday. The stock closed at $43.53 Thursday before the $60 offer was made. Air Products finished at $67.95 and was inactive after-hours.
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 retail customer base, by offering cash and stock with an “implied” value of $62 a share in December.
In a letter Tuesday to Air Products’ chairman and chief executive, Airgas peer Peter McCausland said his company is poised to realize significant benefits from infrastructure investment and industry consolidation when the economy improves. “It makes no sense for the Airgas stockholders to transfer the future value of Airgas to Air Products at a bargain basement price,” he added.
McCausland noted that Airgas’ stock has consistently outperformed Air Products, adding the proposed acquisition would “reduce rather than enhance stockholder value.”
He also accused Air Products of hiring legal and financial advisers that have conflicts, “even after we expressed our strong objections.”
An Air Products spokesman wasn’t immediately available for comment. Hard money training.
Tags: air products, airgas, chemicals, economy improves, financial advisers
