By Ernest Scheyder
NEW YORK, (Reuters) - Industrial gas supplier AirgasInc rejected the latest takeover offer from rival AirProducts and Chemicals Inc Wednesday, saying $65.50per share is not an "appropriate value" or "sensible startingpoint for negotiations."
The comments came the day after risk advisory firm GlassLewis & Co said it did not believe Air Products' offer was thebest option for Airgas shareholders and suggested they shouldsupport incumbent directors at the company's annual meetingnext week.
"We believe this offer is yet another opportunistic attemptto cut off the Airgas stockholders' ability to benefit as thedomestic economy continues its recovery," Airgas founder andChief Executive Officer Peter McCausland said in a letter toshareholders.
An Air Products representative was not immediatelyavailable for comment.
Air Products had sweetened its all-cash offer last week by3 percent to $65.50 per share, or about $5.5 billion.
Air Products initially offered $60 per share in Februaryand has increased the offer slowly since then.
If successful, Air Products would become the biggestindustrial gas company in North America, and it could gainsubstantial benefits when the economy rebounds.
In making the revised offer last week, Air Products said itwould walk away from the proposed deal if Airgas shareholdersdo not support its slate of three board nominees and bylawrevisions when they meet next week in a Philadelphia suburb.
Such a move would probably hurt Airgas' share price, as thestock spiked just after Air Products made its offer public onFeb. 4.
However, if Air Products does withdraw its offer, Airgassaid it would use buybacks "or other transactions to assist itsstockholders who desire to sell their shares in the near term."The company said, though, that such a plan might force it torefinance existing debt.
Air Products is also hoping to change Airgas' bylaws toforce another shareholder meeting in January. The logic of themove is that Air Product would get de facto control of thecompany if its three nominees win Airgas board seats next weekand another three are elected at the January meeting.
As a defense, Airgas said Wednesday that it would committo holding another shareholder meeting in June and in themeantime would explore all alternatives to the "grosslyinadequate" Air Products offer.
Praxair Inc is a competitor to both companies.
In morning trading, shares of Airgas fell 0.3 percent to$65.58, while Air Products rose 1.2 percent to $78.34. (Reporting by Ernest Scheyder; Editing by Lisa Von Ahn)