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Another Hostile Takeover May Fail to Reach Finish Line

Is it a death blow for Air Products?

Airgas Logo
Airgas Logo

That’s the question being asked by investors who have been hoping Air Products would prevail in its 14 month attempt to buy Airgas after the Delaware Supreme Court dealt that effort a severe blow by blocking its ability to put three additional directors on Airgas’s board next January. (When it would have held its annual meeting).

Now, Airgas won’t have to hold its annual meeting for as long as another 11 months—a period of time that may simply be too long for Air Products to withstand given the distractions this attempt has already brought management.

  • To Read the Full Delaware Supreme Court Ruling, Click Here

No word from my sources on the Air Products side right now. With the stock of Airgas down sharply, it may present an opportunity for negotiation, although Airgas now has a stronger hand and its CEO has made it clear he does not want a deal at any price Air products might offer (I have previously reported on Air Product’s unwillingness to raise the current offer of 65.50 above $69).

Today’s news has brought another painful episode for risk arbs, who have watched one hostile after another (think BHP for Potash) fail to get to the finish line.

Check out the spread in other takeover situations (it’s widening) and there does appear to be pain induced liquidation.

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