Air Products & Chemicals Inc. said it may take a $5.1 billion cash offer for Airgas Inc. straight to shareholders after its rival privately spurned two prior attempts to create the largest U.S. industrial gas company.
The $60-a-share bid made public Friday is 38 percent higher than Airgas’ closing price Thursday and is valued at about $7 billion including $1.9 billion in assumed debt, Air Products said in a statement. Air Products would gain more than 1,100 sites that make and sell gases such as oxygen for hospitals, argon for welding and carbon dioxide for beverages.
Air Products chief executive John McGlade said he’s willing to nominate new Airgas directors and take his offer to shareholders after two prior requests for friendly talks were rejected. A combined company would have about $13 billion in sales, replacing U.S. market leader Praxair Inc. and closing the gap with Air Liquide SA of France and Germany’s Linde AG.
“An Airgas investor would have to be ecstatic at this point,” Jake Dollarhide, who helps manage $40 million including Airgas shares at Longbow Asset Management in Tulsa, Okla., said by telephone. “Lots of people think there will be a sweetened offer if Air Products really wants Airgas.”
Airgas shares trading above the bid price indicates the market expects a friendly transaction will be completed at $68 a share within three months, Stephen Grahling, a New York-based managing director at Jefferies & Co., said.
“We are absolutely committed to take this through the proxy fight,” McGlade said.
