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As widely expected, Airgas, Inc. has announced that its Board of Directors has unanimously rejected the overtures of Air Products, noting that last week’s offer ‘very significantly undervalues Airgas’.

With Air Products previously underlining its determination to see the deal through, the stage could now be set for a hostile takeover situation.

In a statement released to the media, Airgas revealed that its Board of Directors had unanimously, “determined that the unsolicited proposal from Air Products & Chemicals, Inc. very significantly undervalues Airgas and its future prospects and is not in the best interests of Airgas stockholders.”

It continued, “The Board rejected the Air Products' proposal after a thorough review and reached its decision after careful consideration with the assistance of its independent financial and legal advisors.”

Citing a number of reasons for rejecting the Air Products proposal, Airgas described how its stockholders are poised to realise the benefits of the company's investments and the nascent economic recovery.

Furthermore, in Airgas’ view, the ‘opportunistic timing’ of any deal would transfer the future value of Airgas to Air Products at a ‘bargain basement’ price.

The statement proceeded to laud the proven track record of Airgas and its healthy potential for the future; further reasons for rejecting any takeover bid.

It explained, “Airgas has a proven track-record of creating value for stockholders (Airgas' stock has consistently and significantly outperformed Air Products' stock) and Airgas is effectively executing on its business plan and delivering solid results.”

“The Airgas Board of Directors is resolutely committed to preserving and enhancing value for Airgas stockholders and will vigorously protect stockholders against grossly undervalued and opportunistic proposals.”

So where do we go from here?

Many expect the situation to reach a hostile takeover situation, as both companies remain resolute in their objectives. With Air Products seemingly unperturbed by the potential for hostility, there could yet be more developments as the coming months unfold.

In its Friday announcement of the proposed deal, the company’s Chairman, President and CEO John McGlade said, “While we are disappointed that Airgas has thus far prevented its shareholders from receiving a substantial premium and immediate liquidity, we have repeatedly communicated to the Airgas Board our willingness to improve our offer to reflect any incremental value they can demonstrate.”

“While it remains our strong desire to reach an agreement with Airgas on a friendly basis, we are fully committed to pursuing this transaction and are prepared to take all necessary steps to complete it, including making an offer directly to Airgas shareholders.”

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