Air Products' $7 billion takeover bid for Airgas badly undervalues the company by about $1.2 billion, Cramer said Monday.
The "Mad Money" host first denounced the bid because he said it "seemed like a shameless attempt by Air Products to steal your upside in Airgas by making a low-ball bid at the low point in the cycle that dramatically understates what Airgas would be worth in an improved economy."
Air Products first offered $60 a share, he said, but that was rejected. They have since raised their offer to $63.50 and then $65.50, which he said is a "meager sum" because he thinks ARG could climb to $80 a share on its own. These bids are holding Airgas' share price down, Cramer said, and after an initial dip in share price, the stock would go higher if shareholders reject the deal.
And the deal should be rejected, Cramer argued. Because Airgas CEO Peter McCausland is "one of the single best, most bankable executives in America." McCausland gave investors a 124 percent gain over the last five years while the S&P 500 is down 9.2 percent over the same time period. In the last 10 years, McCausland produced a 939 percent gain while the S&P dropped 24.7 percent. The Airgas executive also happens to be the largest shareholder of the company and has maintained that it can make more money as an independent company than if it was bought by Air Products. But APD has nominated three directors to Airgas' board and have made proposals that, if approved, would make it difficult for Airgas prevent the takeover.
At this point, Airgas needs all the support it can get to remain independent, Cramer said. That's why he welcomed McCausland to "Mad Money," so he could explain the latest news on this possible takeover. Watch the video see the full interview.
Call Cramer: 1-800-743-CNBC
Questions for Cramer? firstname.lastname@example.org
Questions, comments, suggestions for the Mad Money website? email@example.com