Airgas, known more in the financial world for its historic poison-pill court case than the oxygen and helium tanks it supplies, is once again a target.
On Tuesday, Bloomberg News reported that France's Air Liquide was on the verge of buying Airgas in a friendly deal. The companies announced details of the transaction a couple of hours later.
Air Liquide has agreed to pay $143 a share in all cash, 50 percent higher than Airgas's average closing price for the past 20 days. Naturally, the stock surged.
Decent premium, paid in cash...this sounds awfully familiar. In February 2010, Air Products proposed a takeover of Airgas for $60 a share, all in cash, an offer Airgas refused. After Air Products raised the price several times, its final bid stood at $70 -- a roughly 50 percent premium to the stock's unaffected level. The year-long battle ended when a Delaware Chancery Court judge sided with the target.
Based on Airgas's current share count, Air Liquide's offer works out to $10.3 billion, without accounting for Airgas's net debt. Air Products' bid was worth $5.9 billion. That means Airgas is being valued 75 percent higher today than it was then.
It seems like a decent improvement until you consider that the Standard & Poor's 500 Index has gained 92 percent since Air Products' bid was launched. In that case, investors may have been better off betting on the broader U.S. market's recovery from the recession than piling into Airgas in hopes of a deal. Then again, the S&P 500 is up only 54 percent since Air Products' hostile approach officially failed in February 2011.
But for those that held Airgas from the start, was it really worth the wait? Perhaps that's open to interpretation.
One thing is for certain: Nowadays, with activist shareholders always ready to pounce and companies merging at a record pace, Airgas probably would have a tougher time turning down a 50 percent, all-cash premium.
At least this time, shareholders don't have to worry about a long, drawn-out fight.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
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