AIR PRODUCTS WANTS AIRGAS

Abstract

AIR PRODUCTS & CHEMICALS is launching a hostile tender offer for Airgas’ shares after Airgas rejected an unsolicited $60-per-share cash takeover offer. The bid values Airgas, the largest packaged-gas supplier in the U.S., at $7.0 billion, including $1.9 billion in debt. At the heart of Airgas’ argument is shareholder returns. In recent years, Air Products’ returns have out-performed Airgas’. Over longer periods of time, however, Airgas says, its returns far outstrip Air Products’. According to Airgas, it has generated a return of 516% since 2001, whereas an investment in Air Products would have brought in 142%. Airgas says Air Products is trying to take advantage of a recent slump. “We can certainly understand why Air Products would find an opportunistic acquisition of Airgas to be appealing to Air Products and its stockholders,” wrote Peter McCausland, Airgas’ founder and CEO, in a letter to Air Products CEO John E. McGlade. “However, it makes no sense ...