* Annual meeting can be fast-forwarded to January
* Hostile bidder hopes to win more board seats at meeting
CHICAGO Oct 9 Airgas Inc ARG.N has suffered
a setback in its effort to fight Air Products & Chemicals Inc's
(APD.N) $5.5 billion hostile takeover bid when a judge refused
to throw out a new bylaw that will push the gas distributor's
annual meeting up by a crucial eight months.
The bylaw approved by Airgas shareholders last month is
legal, a judge in Delaware Chancery Court said in a ruling
published late on Friday.
As a result, Airgas, which held its last annual meeting in
September, will convene its next one in January, one where
directors sympathetic to the takeover who were voted onto the
board at last month's meeting could increase their power and
approve the deal over management's objections.
It would create North America's largest industrial gas
company, supplying gases such as helium and nitrogen used in
hospitals and refrigeration.
The judge ruled the bylaw was legal because Delaware law
does not prescribe a minimum amount of time that needs to
elapse between annual stockholder meetings.
Airgas management has rejected the $65.50-a-share cash
offer that Air Products has on the table as too low.
At last month's annual meeting, a shareholder revolt
engineered by Air Products handed three board seats to nominees
who support the deal and stripped Airgas founder and chief
executive Peter McCausland of his title as chairman of the
Airgas then sued Air Products over the bylaw changes that
will speed up the annual meeting and give investors the chance
to approve three more Air Products nominees to the 10-member
board, handing the bidder de facto control of the company it
seeks to buy.
Air Products, based in Allentown, Pennsylvania, and Airgas,
based in Radnor, Pennsylvania, are both incorporated in
The state's corporate law governs about half of the U.S.'s
largest companies and the Court of Chancery has settled
numerous high-profile corporate disputes.
(Reporting by James B. Kelleher; Editing by Xavier Briand)