Moving forward after rejection


This week has been particularly tumultuous for Airgas and Air Products. At the beginning of the week we saw Airgas fervently reject Air Products’ revised tender offer to purchase remaining Airgas shares for $65.50 per share. This was quickly followed by Air Products’ rebuttal accusing Airgas of, ‘value destructive tactics’. Just as gasworld thought a lull had arrived, both companies issued responses making it clear that the saga definitely continues.
Airgas’ rejection supported by two advisory firms:
Two leading proxy advisory firms share Airgas’ recommendation that all company stockholders vote ‘against’ Air Products’ proposal to amend the Company’s By-Laws by requiring a January 2011 meeting of stockholders, and encourage stockholders to vote ‘for’ the election of Airgas’ director nominees.
The firms, Institutional Shareholder Services (ISS) and Glass Lewis & Co, echoed recent statements from the Airgas Board. ISS delivered the following statement on 8th September: “As the current bid remains below a fair and full price, we do not recommend shareholders support the proposal.”
The company also advised, “Vote ‘against’ this proposal because: Pulling the next annual meeting ahead by nine months would significantly impair the defensive value of the classified board, limiting the board’s ability to negotiate the highest offer for shareholders.”
Glass Lewis issued similar recommendations on 7th September, when it stated in a report, “Airgas shareholders should support the incumbent directors on the basis of their solid track record of shareholder value creation and the rigorous analysis of the industry recovery and the Company’s future prospects. We do note that Airgas appears willing to talk with Air Products as long as it comes to the table with a reasonable consideration.”
Peter McCausland, Chairman and CEO of Airgas was pleased with the advisory firms’ statements. He added, “We are pleased that both ISS and Glass Lewis recommend that stockholders vote ‘against’ Air Products’ proposal to amend the Company’s By-Laws to require a January 2011 meeting for stockholders. We also appreciate Glass Lewis’ recommendation that stockholders vote ‘for’ the re-election of all three Airgas’ Directors and ‘against’ Air Products’ other By Law Amendment proposals.”
FTC accepts Air Products’ Consent Decree:
Despite the recent rejection, Air Products remains hopeful. The company was particularly encouraged by the U.S. Federal Trade Commission’s acceptance of its Consent Decree in connection with Air Products’ proposed acquisition of Airgas, Inc.
Approval was gained after the waiting period under the Hart Scott Rodino Antitrust Improvement Act of 1976 expired on 8th September 2010. The consent permits Air Products to acquire Airgas subject to the divestiture of certain assets and permits. These assets relate mainly to Airgas’ liquid bulk and on-site supply of atmospheric gases, including production and related assets.
Air Products Chairman, President and CEO, John E McGlade, remarked, “We are pleased the FTC has accepted the Consent Decree with respect to our acquisition of Airgas. All of the principal conditions to completing a transaction with Airgas has been satisfied. The only thing standing in the way of Airgas shareholders receiving a substantial premium for their shares now is the continued refusal of the Airgas Board to engage with Air Products on any level.”

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