(Corrects year ago second quarter earnings figure to $54.5
million from $56.5 million. Error first appeared in UPDATE 1)
* Airgas says wants offer 'in excess of $70 per share'
* Air Products offering $65.50 per share
* Airgas Q2 adj EPS 83 cts vs Street view 82 cts
* Guides fiscal Q3 forecast mostly below expectations
* Airgas shares up 0.5 percent at $70.34
(Adds CEO interview, analyst comments; updates stock
By Ernest Scheyder
NEW YORK, Oct 26 Airgas Inc ARG.N signaled it
is willing to negotiate a buyout by rival Air Products and
Chemicals Inc (APD.N) for more than $70 per share, more than 7
percent higher than the offer on the table.
The news came as Airgas -- whose shares were up 0.5 percent
at $70.34 -- posted a higher-than-expected quarterly profit,
but forecast earnings in the current quarter mostly below Wall
It is the first time the industrial gas supplier has
provided a specific demand as it tries to fend off a hostile
takeover by Air Products.
With about 83.7 million shares outstanding, an offer of $70
per share would be worth about $5.86 billion, although Airgas
executives insist they want an offer higher than that.
"Our board is unanimous in its willingness to authorize
negotiations with Air Products if Air Products provides us with
sufficient reason to believe that those negotiations will lead
to a transaction at a price" higher than $70 per share, Airgas
Chairman John van Roden said in a letter to Air Products
Chairman John McGlade.
Air Products had supported three of the 10 Airgas board
members at the company's annual meeting last month.
"It's not surprising to me that the three new directors,
once they got inside Airgas ... would come to the same
conclusion" as the rest of the board, Airgas Chief Executive
Officer Peter McCausland told Reuters.
McCausland, who founded Airgas, lost his seat as chairman
when the three new directors were elected last month. He said
he had no plans to try and regain the chairmanship.
Chairman van Roden "is helping me deal with this hostile
takeover attempt," McCausland said. "The help is certainly
Van Roden has been an Airgas board member since October
Many saw McCausland's removal as a de facto acceptance by
Airgas shareholders of the $65.50-per-share cash offer from Air
Given that, it's interesting that the Airgas board
continues to insist on a higher offer, Morningstar analyst
Basili Alukos said.
"The demand for a higher offer shows, to a degree, that the
new chairman truly is independent," Alukos said. "I'm wondering
if it's not the same potential end that would have happened if
Peter McCausland would have remained chairman."
Earlier this month a Delaware Chancery Court judge refused
to throw out a new Airgas bylaw that will advance the company's
annual meeting by eight months, to January. The earlier meeting
will let Air Products nominate three more members to the Airgas
board. If the three win election, Air Products would take
control of the board.
Airgas said it would appeal the judge's ruling.
For the second quarter ended on Sept. 30, Airgas reported
earnings of $66.6 million, or 78 cents per share, up from $54.5
million, or 65 cents per share, a year earlier.
Excluding one-time items, Airgas earned 83 cents per share.
By that measure, analysts expected 82 cents, according to
Thomson Reuters I/B/E/S.
Revenue rose 10 percent to $1.06 billion, meeting analysts'
For the fiscal third quarter, Airgas forecast earnings of
76 cents to 80 cents per share. Analysts expect 80 cents.
For fiscal 2011, Airgas expects earnings of $3.22 to $3.32
per share. Wall Street expects $3.26.
France's Air Liquide (AIRP.PA), an international rival of
both Airgas and Air Products, said on Tuesday that
third-quarter sales rose 15 percent due to a recovery in Europe
and North America. [ID:nLDE69K1NE]
(Reporting by Ernest Scheyder; Editing by Lisa Von Ahn and