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Drama Continues to Mount for Airgas

We’ll have to wait until January to learn whether Chancellor Chandler will throw out Airgas’ poison pill. He informed both sides on Tuesday that he’s leaving for vacation and won’t be back until the New Year.

Airgas Logo
Airgas Logo

That means the Airgas’s board will have to give shareholders its decision on the latest $70 cash offer from Air Products before we get Chandler’s decision.

That decision is the key in this 14 month takeover saga and while tossing the pill still seems unlikely, the rancor and discontent within the Airgas board has lifted the hopes of those who believe Chandler may do the unexpected.

The fact that there is open warfare in the Airgas boardroom, as I reported on The Strategy Session last Friday, is beyond dispute.

One need look no further than the correspondence between the three recently elected board members and the board’s chairman to discern that this is a seriously dysfunctional board, in stark contrast to the bizarre press release issued by Airgas after my report, which claimed the board was functioning effectively.

Perhaps the fact that the board’s chairman agreed to allow the three directors to hire another financial advisor—Credit Suisse—and the fact that they now have their own counsel (Peter Atkins at Skadden Arps) is reflective of some level of functional.

But given the board only got to that point after the three directors threatened litigation and were in turn threatened with the charge of breaching their fiduciary duty, I don’t know if that’s a great reflection of unity.

Finally, in defense of my own reporting on this matter, I would like to point out that in contrast to that bizarre release from late Friday, I never reported that the three directors were unaware of the November 2nd letter in question.

To the contrary, I reported that they were well aware of it and believed its use of the word “unanimous” misrepresented their position…something that the full correspondence makes abundantly clear is the truth.

All of this is a sideshow to the key matter, which is whether the Airgas board will endorse the $70 offer for the company. Regardless of the battle within the board, based on that same nasty correspondence, one would conclude that $70 will still fall short of winning over anything near a majority of the Airgas directors.


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