Airgas Wants More From Air Products (ARG, APD)

After the Airgas, Inc. (NYSE: ARG) unsolicited offer from Air Products & Chemicals, Inc. (NYSE: APD) was made, we noticed how there was a premium to the deal’s public price.  We even noted that Jefferies had given a potential scenario of $68.00.  Now we know why rather than just suspect why.   Airgas’ Board of Directors announced that the Air Products’ February 5 proposal AND the previously rejected $62 per share offer grossly undervalue Airgas.  Based upon how the release was handled this week and based upon the news reports, it seemed that this first denial of an offer was certain.

The company laid out the reasons why the company is worth more, but if you have seen friendly mergers and hostile mergers you already know many of the reasons.  Besides that, it is the duty of a company to secure more in a buyout if possible or likely.  Airgas shares closed up 1.3% at $61.35, but the stock is down 1.3% at $60.55 in the after-hours session.

Our own take here from watching other mergers is that Airgas will get a second offer from Air Products.  The company even noted that it has tried to make more interest and noted that it would make certain separations if needed for regulatory purposes.  Another offer of $64.00 or $65.00 may come back to the company.  Guess what the all-time high was… $65.45, in June-2008.  If Air Products & Chemicals really is genuine, they’ll be back.

JON C. OGG