November 18, 2015
Remember Airgas? Now, It's For Sale.
Posted by Christine Hurt

This is the end of the semester, and time in my Business Organizations syllabus to take about takeover defenses.  And, the latest word on poison pills in the Smith & Williams textbook is Air Products and Chemicals, Inc. v. Airgas, Inc.  If you recall, in this case the board of Airgas refused to redeem its poison pill in the face of a tender offer from APC that was open for sixteen months, ending with a "best and final" offer of $70/share, all cash.  (The share price at the time of the first offer was in the $42 range.)  The Delaware Court of Chancery upheld the board's decision not to redeem the pill where the board (three members of whom were selected by APC) believed that $78 per share was the minimum price.

Today, Air Liquide and Airgas agreed to have AL purchase the company for $143/share (combination of cash (I think) and debt).  This price represents a very large premium, and the market reacted to that premium.  I'm not a big fan of the "just say no" stance of the Airgas board, but maybe they did have a long-term strategy that deserved a chance to play out.  Following the February 2011 decision, the share price has usually been higher than $78, and now shareholders will receive a large premium, though not all-cash and five years later.


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