Airgas Offers Investors June Vote as It Fends Off Hostile Air Products Bid
Airgas Inc., the packaged-gas maker fighting a $5.4 billion hostile takeover bid, promised shareholders a chance to replace most of the board by June if they don’t force the company to hold such a vote in January.
Airgas will put some directors up for re-election at a special meeting June 21, as long as shareholders vote next month against holding a January meeting proposed by hostile bidder Air Products & Chemicals Inc., Radnor, Pennsylvania-based Airgas told shareholders in a letter today. Air Products called the proposal a “delaying tactic.”
Airgas Chief Executive Officer Peter McCausland is bargaining for more time to fend off a $63.50-a-share offer from his company’s bigger rival. He and two other directors on the nine-member board face a re-election vote on Sept. 15 and three more directors would be voted on at the proposed January meeting, raising the prospect that a majority might be replaced within the next five months.
Adding to the pressure on McCausland, investors who often bet on the outcome of takeover battles have become some of his biggest shareholders. Eric Mindich’s Eton Park Capital Management, James Dinan’s York Capital Management LP, and Westchester Capital Management are among firms that bought stakes in the company after Air Products made its offer public in February.
‘Short Time Fuse’
“We believe that the short time fuse of a January deadline would undermine the Airgas board’s negotiating position,” McCausland said in the letter. A January vote would also “limit the Airgas board’s ability to explore ways to enhance stockholder value,” he said.
If Air Products’ proposal for a January meeting is approved, Airgas has already said it plans to challenge its legality in court.
Air Products, which obtained clearance from Federal Trade Commission staff for the proposed acquisition this month, has said it believes it has the support of Airgas shareholders and that only the Airgas board’s “intransigence” is standing in the way of a deal.
“Air Products has given Airgas shareholders a clear path to receive a substantial premium now -- there is no need for further delaying a sale,” Allentown, Pennsylvania-based Air Products said in a statement today.
To contact the reporter on this story: Zachary R. Mider in New York at zmider1@bloomberg.net.
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