Posted February 16, 2011
Air Product ends Airgas hostile takeover effort
Air Products & Chemicals today decided to withdraw its offer to acquire Airgas.
The decision followed the Delaware Chancery Court's ruling Tuesday to allow Airgas to use its anti-takeover defense, known as a poison pill, to ward off the hostile takeover.
"We are disappointed by the court's decision. We believe the Airgas Board of Directors has done a great disservice to Airgas shareholders by never allowing them to decide for themselves whether they want to accept our $70 per share all-cash offer," said John E. McGlade, Air Products chairman, president and chief executive officer. "It is abundantly clear that the Airgas Board is thoroughly entrenched in its position, so we have decided to withdraw our offer and move on."
McGlade added that acquiring Airgas at an appropriate price would have been "a value-creating opportunity," but Air Products has other compelling growth opportunities around the world that the company plans to pursue.
Responding to the court ruling, Airgas chief executive officer Peter McCausland called the ruling consistent with established Delaware precedent. "Airgas' Stockholder Rights Plan has been in place since 1987 and is an important element of our corporate governance structure," McCausland said.
"I find that the Airgas board has met its burden ... to articulate a legally cognizable threat (the allegedly inadequate price of Air Products' offer, coupled with the fact that the majority of Airgas's stockholders would likely tender into that inadequate offer) and has taken defensive measures that fall within a range of reasonable responses," Chancellor William Chandler wrote in his opinion.
Airgas also announced a plan to repurchase up to $300 million of its outstanding shares of common stock. As of February 15, 2011, Airgas had approximately 84.2 million common shares outstanding.
"This new share repurchase program reflects our confidence in the future, based on our favorable business trends, solid balance sheet, and strong cash flow," said McCausland. "We believe we can continue to fund our growth strategies while realizing attractive earnings accretion from share repurchases."
Click for Airgas press statement.
Click for Air Products & Chemicals press statement.
