Air Products' latest overture to Airgas rebuffed

NEW YORK Mon Sep 13, 2010 11:38am EDT

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NEW YORK (Reuters) - Industrial gas company Air Products and Chemicals Inc (APD.N) said it attempted to open talks on its $5.5 billion hostile bid for Airgas (ARG.N) last week, but Airgas declined to meet.

Air Products said in a filing with the Securities and Exchange Commission on Monday that its investment bankers called Airgas' financial advisers on Friday, on the suggestion of certain Airgas shareholders.

Air Products said it told Airgas that it had the flexibility to further increase its $65.50-a-share cash bid, but would not do so without negotiations with Airgas.

Air Products also offered to negotiate a deal that would allow the company to shop itself to other bidders.

But Airgas' financial advisers told Air Products that Airgas had not changed its position on the bid and was unwilling to meet at this time on the current offer.

Shares of Airgas were down 38 cents or 0.6 percent at $64.39 on the New York Stock Exchange on Monday morning. Air Products shares were up 1.1 percent at $78.81.

In the filing, Air Products said it had spoken with Airgas investors who had met with Airgas Chief Executive Peter McCausland and some Airgas directors. They told Air Products they believed that Airgas indicated willingness to negotiate a deal.

According to Air Products, Airgas' financial advisers said that the company's board and McCausland were unified in their views on a possible deal.

Airgas rejected Air Products' bid last week, saying $5.5 billion was not an "appropriate value" or "sensible starting point for negotiations."

Airgas shareholders are set to vote on a slate of directors proposed by Air Products, as well as a change to the company's bylaws that would move forward Airgas' next annual meeting, later this week.

An Airgas spokesman declined to comment.

(Reporting by Michael Erman, editing by Maureen Bavdek and Matthew Lewis)

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