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Delaware court hands Airgas setback in takeover fight
October 9, 2010 / 11:56 PM / 7 years ago

Delaware court hands Airgas setback in takeover fight

* Annual meeting can be fast-forwarded to January

* Hostile bidder hopes to win more board seats at meeting

CHICAGO, Oct 9 (Reuters) - 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 board.

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 Delaware.

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)

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