Airgas Inc. on February 22 announced that its board of directors, after careful consideration with its independent financial and legal advisors, voted unanimously to reject the unsolicited tender offer from Air Products & Chemicals Inc. to acquire all outstanding common shares of Airgas at a price of $60.00 per share in cash. the board unanimously recommends that Airgas stockholders not tender their shares into Air Products’ offer.
The board noted that the value offered by Air Products is unchanged from the unsolicited proposal Air Products made on February 4, 2010, which the board thoroughly considered and rejected on February 9, 2010. The basis for the board’s recommendation with respect to the Air Products tender offer is set forth in Airgas’ Schedule 14D-9 filed February 22 with the Securities and Exchange Commission (SEC).
“The Airgas board of directors is unanimous in its belief that the Air Products offer significantly undervalues Airgas and fails to reflect the value of our industry leading position and future growth prospects,” said Airgas chairman and CEO Peter McCausland. “Since our IPO in 1986, Airgas has employed a disciplined approach to steadily growing revenue, EBITDA and shareholders equity, and Airgas stock has achieved total shareholder return over that period of more than seven times the return of the S&P 500 index. The Airgas Board strongly urges stockholders to reject Air Products’ offer and not tender their shares.”
The reasons for the Airgas board’s recommendation to reject Air Products’ offer, which the company detailed in its 14D-9 filing, include:
- The offer grossly undervalues Airgas.The offer does not reflect the value inherent in Airgas’ future prospects, its extraordinary track record in creating stockholder value over its nearly 30-year history and its position as the largest and most valuable packaged gas business in the world. The Airgas board is confident that Airgas will, consistent with its history, deliver greater value to its stockholders by executing its strategic plan than would be obtained under the offer.
- The offer and its timing are extremely opportunistic.Air Products is trying to obtain the future value of Airgas at a bargain basement price. Airgas and its stockholders are poised to realize significant benefits as the economy emerges from a deep recession, making this precisely the wrong time to sell Airgas.
- The offer is highly uncertain and any payments made to Airgas stockholders would be considerably deferred.We believe the offer is highly likely to be subject to substantial delays related to U.S. antitrust clearance. Air Products’ failure to commit to make the necessary divestitures and its failure to obtain antitrust clearance in its last attempt to acquire a major U.S. gas company heighten the concern over regulatory risk and delay.
- The offer’s extraordinarily broad conditions render it illusory.The numerous conditions of the offer, many of which may be asserted by Air Products in its sole discretion and have low thresholds of materiality, create significant uncertainty and risk as to whether the offer can be completed and the timing for completion.
- Air Products has employed highly aggressive tactics – including deceptive statements, meritless litigation and misleading personal attacks – designed to direct attention away from the grossly undervalued and opportunistic nature of its offer.These tactics underscore the marked difference between the cultures of the two companies and the challenges Air Products would face in integrating Airgas’ operations and meeting the needs of its loyal customers.
- Air Products’ acquisition of Airgas will likely reduce value. Air Products has a poor acquisition track record, little experience relevant to Airgas’ business and a synergy plan that demonstrates its fundamental misunderstanding of our business. This is particularly concerning if Air Products again revises its offer to include stock.
“We believe that, in an effort to distract Airgas stockholders from the grossly undervalued and highly opportunistic nature of its offer, Air Products has resorted to personal attacks and deceptive statements,” concluded McCausland. “Our board of directors and management team remain focused on the execution of our business strategies to deliver superior value to Airgas stockholders, and we will not allow the tactics employed by Air Products and its advisors to deter us from achieving our objectives.”
The board also took action under Airgas’ shareholder rights plan to defer the distribution of rights that would otherwise occur ten business days after the announcement of the offer, which action is further described in Airgas’ 14D-9.
The company’s 14D-9 filing is available on the SEC’s Web site, www.sec.gov. In addition, the 14D-9 filing, this press release and other materials related to Air Products’ Unsolicited Proposals are available in the “Investor Information” section of the company's website at www.airgas.com, or through the following web address: http://investor.shareholder.com/arg/airgascontent.cfm.
About Airgas Inc.
Airgas Inc., through its subsidiaries, is the largest U.S. distributor of industrial, medical, and specialty gases, and hardgoods, such as welding equipment and supplies. Airgas is also one of the largest U.S. distributors of safety products, the largest U.S. producer of nitrous oxide and dry ice, the largest liquid carbon dioxide producer in the Southeast, and a leading distributor of process chemicals, refrigerants, and ammonia products. More than 14,000 employees work in over 1,100 locations, including branches, retail stores, gas fill plants, specialty gas labs, production facilities and distribution centers. Airgas also distributes its products and services through eBusiness, catalog and telesales channels. Its national scale and strong local presence offer a competitive edge to its diversified customer base.
