Air Products & Chemicals (NYSE:APD) has made what it calls its “best and final offer” to acquire rival Airgas (NYSE:ARG), upping its bid to $70 a share, a 61% premium over Airgas' closing price in February when talks were initially made public.
Allentown, Penn-based Air Products has been attempting to acquire Airgas for more than a year, originally approaching the company in October 2009. It has lifted its offer several times in an attempt to strike a deal, with its most recent valued at $65.50 a share, or $5.5 billion.
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Air Products also went ahead and received necessary regulatory approval and obtained support of Airgas’ shareholders at its annual fiscal 2010 meeting, however its efforts still proved unsuccessful.
Airgas, the largest US distributor of packaged gases, had said the previous bid from Air Products was too low, arguing the company was really worth about $6.5 billion.
In a statement, Air Products said Radnor, Penn.-based Airgas has responded with “unrealistic price expectations and repeated delaying tactics, all in support of a ‘just say no’ strategy.”
“The majority of the Airgas board has made it clear that they do not intend to negotiate a deal,” said Air Products CEO John E. McGlade. “The reality is that there are no other bidders for Airgas and Airgas has no alternative value creation plan other than the status quo.”
McGlade said the upgraded offer delivers an “extraordinary premium” to Airgas shareholders while at the same time creating “significant value” for Air Products’ stakeholders.
However shares of Airgas plunged nearly 6% on the news to about a 6-month low. Air Products, meanwhile, surged more than 3% to a 52-week high.
The expiration of the tender offer has been extended to Jan. 14 from Dec. 17 to give the Delaware Chancery Court time to rule on their ongoing litigation.'
As of the Wednesday night, more than 2.17 shares of Airgas had been validly tendered into and not withdrawn from the offer, according to Air Products.