Airgas board rejects revised tender offer from Air Products

Airgas Inc. on July 21 announced that its board of directors, after careful consideration with its independent financial and legal advisors, voted unanimously to reject the revised unsolicited tender offer from Air Products & Chemicals Inc. to acquire all outstanding common shares of Airgas at a price of $63.50 per share in cash. The board unanimously recommends that Airgas stockholders not tender their shares into Air Products’ offer.

Airgas chairman and chief executive officer Peter McCausland said, “The Airgas board of directors is unanimous in its belief that the revised offer from Air Products continues to grossly undervalue Airgas and does not fairly compensate stockholders for Airgas’ extraordinary track record, outstanding recent results, excellent growth prospects or industry-leading position. In our board’s judgment, the new Air Products offer, like Air Products’ previous offers, is grossly inadequate and an extremely opportunistic attempt to cut off the Airgas stockholders’ ability to benefit as the domestic economy continues its recovery.”

McCausland continued, “Our board believes that recent events validate its original recommendation and strengthen its conviction that Airgas will generate more value for Airgas stockholders by executing its strategic plan than by pursuing the revised Air Products tender offer. In this regard, in the quarter ended June 30, 2010, Airgas recorded adjusted earnings per share of $0.83,* the second-best earnings quarter in company history, and achieved operating margins near record levels. Importantly, Airgas achieved these results despite revenues that have not yet returned to pre-recessionary levels. In addition, for the quarter ending June 30, 2010, Airgas recorded same-store year over year sales growth of 6 percent, which is the first positive same-store year over year result since the quarter ending December 31, 2008. This impressive performance is consistent with Airgas’ historical pattern of strong but delayed recovery as the domestic economy emerges from recession, and it supports our board’s view that actions taken and investments made during recent years have created an even stronger, more profitable company.

“As a result of this performance and the improved outlook, Airgas raised its full-year fiscal 2011 earnings guidance from a range of $2.95 to $3.05 to a new range of $3.15 to $3.30, representing 18 percent to 23 percent growth over fiscal year 2010 adjusted earnings. Further, the increasing momentum Airgas is seeing reinforces our board’s confidence in our calendar 2012 earnings goal of at least $4.20 per share, and with continued modest improvement in the economy, Airgas could very well outperform that objective. Airgas stockholders – not Air Products – should reap the benefits of our increased earning power and bright future.

“Airgas believes that Air Products’ cost of acquisition of the company under its $63.50 per share proposal is effectively the same as under Air Products’ December 2009 $62 per share stock and cash proposal. Since December 31, 2009, Airgas has reduced its adjusted debt – which includes amounts outstanding under its trade receivables securitization – by over $160 million.* As a result, while the per-share amount that Air Products has offered is nominally higher, Air Products’ total cost to acquire Airgas – as measured in terms of enterprise value – remains the same at approximately $7.15 billion, despite Airgas’ strongly increasing earnings and enhanced prospects,” concluded McCausland.