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Why Airgas Should Reject an Air Products Takeover

Air Products & Chemicals made a $60 a-share hostile bid for Airgas this week. Regardless of what Wall Street may think, Cramer called it “beyond outrageous,” saying the deal should not be allowed to happen.

The price Air Products is offering dramatically understates what ARG is worth in an improved economy, Cramer said. Airgas is up 88% since CEO Peter McCausland told Mad Money in the fall of 2008 – the height of the depression/recession, mind you – that his firm would thrive in spite of the economy. Very few executives out there handled the downturn as well as McCausland, yet right as the economy is turning investors might want to trade him in.

That’s short-term thinking. Consider this: With the exception of 2009, Airgas has outperformed APD in every year since 2000. Thanks to McCausland, ARG is up 75 percent over the last five years and 471 percent over the last decade. Meanwhile Air Products is up just 25 percent and 139 percent over those same time periods, respectively. Is it out of the realm of possibility to believe that McCausland would continue to deliver these better returns?

Certainly not, Cramer said. That’s not to say he doesn’t like Air Products, because he’s a fan of that company, too. But he thinks it’s wrong to fold on Airgas for a fast buck. And the fact that shareholders seem so willing to do so has him outraged.

“Shareholders of Airgas, I implore you not to accept this bid,” Cramer said. “Be patient and allow an independent Airgas and an independent Mr. McCausland to make you even more money over time.”

Call Cramer: 1-800-743-CNBC

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