UPDATE 1-Airgas directors split over takeover price

Sun Dec 12, 2010 5:34pm EST

* 3 directors said board wasn't unanimous on $78/shr floor

* Airgas had denied division on the board (Adds background, details on Air products response)

NEW YORK Dec 12 (Reuters) - Three Airgas Inc (ARG.N) board members disagreed with the board that the company was worth a minimum of $78 a share, a court filing shows, adding a new twist to the industrial gas company's takeover battle with rival Air Products & Chemicals Inc (APD.N).

The directors, who were backed by Air Products in their bid to join the board earlier this year, challenged company statements this month that that board was unanimous in setting a $78-per-share floor for a deal, according to a filing with the Chancery Court in Delaware.

Airgas declined to comment.

Air Products made its "best and final" offer on Thursday offering $70 per share and valuing Airgas at $5.9 billion. [ID:nN09252192] The company has been trying to buy rival Airgas since February.

Air Products has also asked the Delaware court to throw out Airgas' poison pill shareholder rights plan -- a key defense against a hostile takeover. A court filing from that dispute quotes a letter the three recently elected board members sent to Airgas Chairman John van Roden.

In their Dec 7 letter, John Clancey, Robert Lumpkins and Ted Miller say they agree with the board that a $65.50-per-share offer was inadequate. But they disagreed that $78 should be a minimum price.

"To be clear, at no time did any of us take the position that a $78 offer price was the price of admission to having any discussions with Air Products, nor did we agree that $78 was the minimum per-share price at which Airgas might be purchased," the directors wrote.

Air Products has asked the Delaware court to order Airgas to enter the entire letter from the three directors as well as van Roden's response into the record.

On Friday, an Airgas spokesman released a statement from the directors denying that there was division on the board, in response to a CNBC television report that they planned to challenge company statements. [ID:nN10126166]

CNBC said then that the directors had hired law firm law firm Skadden, Arps, Slate, Meagher & Flom and investment bank Credit Suisse (CSGN.VX) to advise them.

Earlier this fall, Airgas shareholders voted to oust the chairman and replace three members of the board with the slate backed by Air Products. [ID:nN14275664] (Reporting by Nick Zieminski and Michael Erman; Editing by Jan Paschal and Diane Craft)

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