* Delaware court won't disqualify Air Products' law firm
* Air Products says will move forward with buyout offer
* Airgas says 'disappointed' in ruling
(Adds link to Breakingviews column)
NEW YORK, March 5 A Delaware court declined on
Friday to disqualify a law firm that Air Products and Chemicals
Inc (APD.N) is using in its $5.1 billion bid to acquire rival
Airgas Inc ARG.N.
As part of its bid, Allentown, Pennsylvania-based Air
Products is using the services of Cravath, Swaine & Moore LLP,
a law firm that has done work in the past for Airgas.
That prompted Airgas to sue, hoping to persuade a judge
that Cravath has a conflict of interest by representing Air
Airgas has rejected Air Products' takeover offer.
Cravath has worked consistently for Air Products for at
least 43 years.
It also worked for Airgas from May 2001 until October 2009,
when it decided it could no longer work for Airgas in light of
Air Products' brewing offer.
Calling disqualification a "Draconian" measure, Delaware
Chancellor William Chandler III said he had seen no evidence
Cravath would use any information from its time representing
Airgas in the buyout case.
"Airgas here has not demonstrated ... persuasively, let
alone clearly and convincingly, that it would be disadvantaged
by the presence of its former counsel as advocate for its
opponent, Air Products," Chandler said in his ruling.
Airgas said it was "disappointed" in the ruling, and that
is continues to feel Air Product's offer "grossly undervalues"
Reuters Breakingviews column by Christopher Swann
"We are prepared to take all necessary steps to preserve
and protect stockholder value," the Radnor, Pennsylvania-based
Air Products said the entire suit against Cravath was a
"side show" to draw attention away from the bid, and that it
remains committed to completing the deal, worth about $60 per
"Rather than acting as responsible fiduciaries and meeting
with us to discuss our offer, the Airgas Board has continued to
permit management to 'just say no' to our compelling offer
while offering only the vague promise that Airgas shareholders
will receive greater value 'simply with the passage of time,'"
Air Products said in a statement.
New York-based Cravath said the court's ruling "speaks for
itself," and declined to comment further.
On the New York Stock Exchange, Air Products rose 2.1
percent to $73.42 while Airgas fell 0.2 percent to $65.71
shortly before the close.
(Reporting by Ernest Scheyder; Editing by Richard Chang)