The board of Air products has gone where it has proved reluctant to go over the last year…to a price for Airgas that starts with the number seven.
That price is $70 and Air Products says it will be its last offer for Airgas as it seeks to bring the company to heel.
It’s far from clear if $70 will be enough to win the day. In fact, takeover investors tell me they believe the decision by Air products to make this bid “best and final” is in their opinion, likely to bring a failed end to its pursuit.
Air Products acted in response to a veiled request from Chancellor William Chandler to raise its bid, as he weighs a challenge to Airgas’s poison pill and prepares to receive requested briefs in the matter.
It is far from clear how Chandler will ultimately rule on the pill, but if Air Products wanted to have any hope of overturning the pill, it needed to raise its bid. While Air Products was very reluctant to exceed $69 a share, it is $70 a share that was cited in testimony in front of Chancellor Chandler by Airgas as a price that would prompt negotiations and so Air Products had to go to $70 to have any hope of having Chandler side with it.
Finally, while it may simply be the hallucinations of risk arbs who have too much time on their hands, I have duly noted a discrepancy between the statements between Air Products and Airgas when it comes to the unanimity of opinion on Airgas’s board.
In its November 2nd letter to Air Products, Airgas cited the unanimity of its board in the belief that the company is worth at least $78 a share, while Air Products keeps referring to the “majority” of Airgas directors as being against any offer below $78.
Is it possible that Air Products does not believe all the Airgas directors are united in their opposition and if so, what does it mean? Stay tuned.
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