Air Products boosts Airgas acquisition offer

Air Products and Chemicals Inc. said Monday it has boosted its offer to buy rival Airgas Inc. to $65.50 per share, but said it will walk away if Airgas shareholders don't elect its board slate and approve its bylaw proposals.

Based on 83.7 million Airgas shares outstanding in August, that puts Air Products' latest bid at about $5.48 billion.

The new bid represents a 50 percent premium over the closing price for Airgas shares of $43.53 on Feb. 4, the day before Air Products' original bid, which amounted to about $5.1 billion, or $60 per share. Air Products later raised its offer to as much as $63.50 per share, but Airgas has said that "grossly undervalues" the company.

Airgas shares closed Friday at $66.67. U.S. markets were closed Monday in observance of the Labor Day holiday.

Airgas said in a separate statement Monday evening that its board will review the revised offer, and it is asking shareholders to take no action until that is finished. The Airgas statement noted that the closing price of its stock Friday was higher than the latest Air Products offer.

Air Products Chairman and CEO John E. McGlade said in a statement Monday that his company has given Airgas shareholders "a clear path" to completing a deal, but it needs a strong mandate from them.

Air Products wants Airgas shareholders to elect its three nominees to its board and approve some bylaw proposals at its Sept. 15 annual meeting. Air Products nominated former Sea-Land Services Inc. CEO John P. Clancey, 65; Mosaic Co. Chairman Robert L. Lumpkins Jr., 66; and Crown Castle International Corp. founder and CEO Ted B. Miller Jr., 58.

The bylaw amendments include some proposed changes to director eligibility requirements, a requirement for Airgas to hold future annual meetings in January and the repeal of all bylaw amendments made after April 7.

Air Products said it is ready to start immediate negotiations with Airgas to complete the deal if shareholders approve its candidates and the bylaw changes. If they fail to do so, Air Products said it will end its offer "and move on to the many other attractive growth opportunities available"

Air Products, of Allentown, Pa., sells gases for industrial, medical and other uses. A combination of the companies would create one of the biggest industrial gas companies in the world.

Airgas, of Radnor, Pa., sells industrial and medical gases and provides gas equipment, welding products, tools, and safety gear.

Last month, Last Airgas said 80 percent of its shareholders had not tendered their shares under the previous Air Products offer.