Letter Questions Airgas Statements Regarding Air Products’ Offer
August 19, 2010 Lehigh Valley, Pa.
Air Products (NYSE: APD) today sent the following letter to the Airgas (NYSE: ARG) Board of Directors:
19 August 2010
Board of Directors
259 North Radnor-Chester Road
Radnor, PA 19087-5285
As the September 15 Annual Meeting approaches, we believe Airgas shareholders will judge the credibility of the incumbent Board in discharging its fiduciary duty of candor to shareholders.
The Airgas statements below are just a few of many which speak directly to the candor of the Board with shareholders and the credibility of its objections to our offer. Airgas has continually suggested that shareholders’ realization of value will be delayed—but with our fully financed all-cash offer, and our execution of a Consent Decree with the Staff of the Federal Trade Commission, any further delay in completing this transaction is due solely to the Airgas Board.
On Regulatory Approval:
“[Air Products] ignores . . . the regulatory issues that . . . would slow the process considerably.”
Letter from Peter McCausland to John McGlade, December 8, 2009
“[R]egulatory concerns . . . create significant uncertainty as to when—if ever—Airgas stockholders would receive consideration under the Offer.”
Airgas 14D-9, February 22, 2010
“[The] regulatory risks are significant.”
Airgas Revised Preliminary Proxy Statement, July 8, 2010
“[T]he antitrust regulatory authorities would be likely to require in connection with any approval that Air Products agree to divest substantial assets or businesses . . . . The timing of any such approval . . . impose[s] uncertainty . . . .”
Airgas 14D-9, July 21, 2010
Air Products’ Consent Decree was “widely anticipated.”
Airgas Press Release, August 16, 2010
“The offer is highly uncertain and any payments made to Airgas stockholders would be considerably deferred.”
Airgas Press Release, February 22, 2010
“[A]ny comparison of the ‘current’ value which Air Products claims to be offering . . . must take into account . . . the time value of money . . . .”
Airgas 14D-9, February 22, 2010
“[T]he Offer is highly uncertain and would require a significant amount of time to complete, even under the most favorable circumstances.”
Airgas 14D-9, July 21, 2010
Air Products has agreed with the Staff of the Federal Trade Commission on a consent decree that would resolve any regulatory issues. The only remaining hurdles to prompt completion of the offer are within the control of the Airgas Board.
Airgas Board’s response: None
For more than 10 months, Air Products has attempted to engage the Airgas Board in discussions. We have proceeded with our offer because of the undeniable logic of this combination, with its clear benefits for the shareholders, customers, and employees of both companies.
On September 15, your shareholders have an important decision to make—one we believe will be heavily influenced by their judgment of whether the incumbent Airgas Board has been honest with them and is acting in their interests by refusing to negotiate with Air Products. We urge you once again to reconsider your position with respect to our offer.
Very truly yours,
John E. McGlade
Air Products (NYSE:APD) serves customers in industrial, energy, technology and healthcare markets worldwide with a unique portfolio of atmospheric gases, process and specialty gases, performance materials, and equipment and services. Founded in 1940, Air Products has built leading positions in key growth markets such as semiconductor materials, refinery hydrogen, home healthcare services, natural gas liquefaction, and advanced coatings and adhesives. The company is recognized for its innovative culture, operational excellence and commitment to safety and the environment. In fiscal 2009, Air Products had revenues of $8.3 billion, operations in over 40 countries, and 18,900 employees around the globe. For more information, visit www.airproducts.com.
On February 11, 2010, Air Products Distribution, Inc. (“Purchaser”), a wholly owned subsidiary of Air Products and Chemicals, Inc. ("Air Products"), commenced a cash tender offer for all the outstanding shares of common stock of Airgas, Inc. ("Airgas") not already owned by Air Products, subject to the terms and conditions set forth in the Offer to Purchase dated as of February 11, 2010 (the "Offer to Purchase"). The purchase price to be paid upon the successful closing of the cash tender offer is $63.50 per share in cash, without interest and less any required withholding tax, subject to the terms and conditions set forth in the Offer to Purchase, as amended. The offer is scheduled to expire at midnight, New York City time, on Friday, October 29, 2010, unless further extended in the manner set forth in the Offer to Purchase.
This communication does not constitute an offer to buy or solicitation of an offer to sell any securities. The tender offer is being made pursuant to a tender offer statement on Schedule TO (including the Offer to Purchase, a related letter of transmittal and other offer materials) filed by Air Products with the U.S. Securities and Exchange Commission (“SEC”) on February 11, 2010.INVESTORS AND SECURITY HOLDERS OF AIRGAS ARE URGED TO READ THESE AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders can obtain free copies of these documents and other documents filed with the SEC by Air Products through the web site maintained by the SEC at http://www.sec.gov. The Offer to Purchase and related materials may also be obtained for free by contacting the Information Agent for the tender offer, MacKenzie Partners, Inc., at 212-929-5500 or toll-free at 800-322-2885.
Air Products has filed a definitive proxy statement on Schedule 14A dated July 29, 2010 with the SEC in connection with the solicitation of proxies for the 2010 annual meeting of Airgas stockholders. The definitive proxy statement has been mailed to shareholders of Airgas. INVESTORS AND SECURITY HOLDERS OF AIRGAS ARE URGED TO READ THE PROXY STATEMENT AND OTHER DOCUMENTS RELATED TO THE SOLICITATION AND FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and security holders will be able to obtain free copies of these documents (if and when available) and other documents filed with the SEC by Air Products through the web site maintained by the SEC at http://www.sec.gov. These materials may also be obtained for free by contacting Air Products’ proxy solicitor for the 2010 Airgas annual meeting, MacKenzie Partners, Inc., at 212-929-5500 or toll-free at 800-322-2885.
CERTAIN INFORMATION REGARDING PARTICIPANTS
Air Products, Purchaser, and certain of their respective directors and executive officers and the Air Products nominees may be deemed to be participants in the proposed transaction under the rules of the SEC. Security holders may obtain information regarding the names, affiliations and interests of Air Products’ directors and executive officers in Air Products’ Annual Report on Form 10-K for the year ended September 30, 2009, which was filed with the SEC on November 25, 2009, and its proxy statement for the 2010 Annual Meeting, which was filed with the SEC on December 10, 2009; and of Purchaser’s directors and executive officers in the Offer to Purchase. Information about the Air Products nominees is included in the definitive proxy statement Air Products filed with the SEC on July 29, 2010 relating to the 2010 annual meeting of Airgas stockholders. These documents can be obtained free of charge from the sources indicated above. Additional information regarding the interests of these participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, is also included in the definitive proxy statement filed by Air Products with the SEC.
All statements included or incorporated by reference in this communication other than statements or characterizations of historical fact, are forward-looking statements. These forward-looking statements are based on our current expectations, estimates and projections about our business and industry, management’s beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as “anticipates”, “expects”, “intends”, “plans”, “predicts”, “believes”, “seeks”, “estimates”, “may”, “will”, “should”, “would”, “could”, “potential”, “continue”, “ongoing”, similar expressions, and variations or negatives of these words. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement. Important risk factors that could contribute to such differences or otherwise affect our business, results of operations and financial condition include the possibility that Air Products will not pursue a transaction with Airgas and the risk factors discussed in our Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K, and other SEC filings. The forward-looking statements in this release speak only as of the date of this filing. We undertake no obligation to revise or update publicly any forward-looking statement, except as required by law.
(Sard Verbinnen & Co)
George Sard / David Reno
Tel: (212) 687-8080
Larry Dennedy / Charlie Koons
Tel: (212) 929-5239 / (212) 929-5708