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Advisor Backs Rival's Picks for Airgas Board

A well-known proxy advisor recommends that Airgas shareholders vote for the three candidates for the Airgas board that have been nominated by Air Products, which is trying to acquire its rival.

Air Products
Source: Air Products
Air Products

A second proxy firm suggested keeping the incumbent directors on the Airgas board.

The recommendations disclosed Thursday come a day after Airgas rejected a sweetened $5.5 billion buyout bid from Air Products.

On Wednesday, Airgas said the $65.50 per share offer still grossly undervalues the company and is only a $2 hike from Air Products' previous offer.

Airgas also advised its shareholders to reject the board nominees and by law amendment proposals that Air Products supports. The Airgas shareholders' annual meeting is next Wednesday.

Institutional Shareholder Services suggests shareholders vote for Air Products' nominees to the Airgas board, while the proxy firm Glass Lewis & Co. supports the three incumbents.

But the proxy firms do agree that Airgas shareholders should reject a January 2011 meeting proposed by Air Products.

ISS said moving the meeting date up by nine months would limit the ability of Airgas's board to try to get the best acquisition offer for its stockholders and gives control of the negotiation process to Air Products.

On Thursday Air Products said it believes the Airgas board is against selling the company, regardless of what amount is offered.

Airgas said it will hold a special shareholders meeting on June 21, 2011 if its stockholders reject the proposed January meeting date. Airgas Chairman and CEO Peter McCausland said in a statement that the suggested summer 2011 meeting would give stockholders the chance to have its board in place by June.

But Air Products said Airgas's plan "to hold a special meeting in June 2011 as a way to placate shareholders is illusory. They have made no commitment to explore a sale of the company now, or ever."

Air Products, of Allentown, Pa., sells gases for industrial, medical and other uses. Airgas, of Radnor, Pa., sells industrial and medical gases and provides gas equipment, welding products, tools, and safety gear.

The companies have gone back and forth over a possible deal for months. Air Products announced a bid in February of about $5.1 billion, or $60 per share. On Monday, Air Products raised its offer from a previous price of $63.50 per share.