UpdateAirgas shareholders told to take no action after Air Products bid

05 February 2010 15:38  [Source: ICIS news]

(Adds Airgas and Air Products comment throughout)

LONDON (ICIS news)--Airgas has advised its shareholders to take no action after it received an unsolicited proposal from industrial gases major Air Products to acquire the company for $60.00 (€43.80) per share or $5.1bn in cash, the US industrial gases company said on Friday.

The total value of the deal would be $7.0bn, including $5.1bn of equity and $1.9bn of assumed debt, Air Products said.

Airgas said its board of directors would review the proposal with its financial and legal advisors.

“At $60.00 per share, the offer provides a 38% premium to Airgas shareholders based on Thursday's closing price of $43.53 and is 18% above Airgas’ 52-week high,” Air Products said in a statement.

In the past four months, Air Products had made two written offers but they were rejected by Airgas' board of directors, which unanimously determined that the proposals were grossly undervalued and not in the best interests of the company or its shareholders.

Air Products expected cost savings of $250m by the end of year two of the acquisition and said the deal would immediately add to its earnings.

Air Products, headquartered in Pennsylvania, added that the combined company would be the largest industrial gases company in North America and one of the largest in the world.

“Bringing together these two highly complementary companies would create substantial value,” said John McGlade, Air Products’ chairman, president and CEO.

“While we are disappointed that Airgas has thus far prevented its shareholders from receiving a substantial premium and immediate liquidity, we have repeatedly communicated to the Airgas Board our willingness to improve our offer to reflect any incremental value they can demonstrate,” McGlade added.

McGlade said the company was fully committed to pursuing the transaction and was prepared to take all necessary steps to complete it, including making an offer directly to Airgas shareholders.

Air Products said it has secured committed financing from its financial adviser, JP Morgan, to complete the offer.

In February 2002, Airgas bought the majority of the US packaged gas business of Air Products including nearly 100 facilities in 30 states for $236m in cash.

"This deal has tremendous strategic and industrial logic," McGlade said in a conference call with investors. "Synergies would be possible by reducing back office costs and introducing the enterprise management systems already used by Air Products in Europe and Asia to North America, Air Products said.

"We do believe the timing is excellent for a re-entry into the North American packaged gases market." McGlade said. "We are committed to completing this transaction."

($1 = €0.73)

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By: Franco Capaldo
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