Air Products And Chemicals, Inc. v. Airgas, Inc.

2011 WL 806417 (Del.Ch. 2011)

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Nature of the Case

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Facts

In February 2010, Air Products (P) launched a public tender offer for Airgas stock. Eventually, the tender offer stood at a “best and final offer” of $70 per share. The Airgas (D) board was unanimous that Airgas was worth at least $78 per share. In addition to its classified board and other takeover defenses, D used a shareholder rights plan with a 15 percent triggering threshold to ward off the unwanted offer. P sought the removal of these defenses. P then nominated a slate of three directors for election at the 2010 annual meeting. D then proposed three bylaws. On September 15, 2010, D’s 2010 annual meeting was held, and all three of P’s nominees were elected, and all three of D’s bylaw proposals were adopted. On December 21, 2010, D's board unanimously, including P's nominees, rejected D's “best and final” $70 offer as inadequate. This suit resulted. A review of D’s poison pills. As a result of D’s classified board structure, it would take two annual meetings to obtain control of the board. In addition to its staggered board, D has three main takeover defenses: (1) a shareholder rights plan (“poison pill”) with a 15% triggering threshold, (2) D has not opted out of Delaware General Corporation Law (“DGCL”) § 203, which prohibits business combinations with any interested stockholder for a period of three years following the time that such stockholder became an interested stockholder, unless certain conditions are met, and (3) D’s Certificate of Incorporation includes a supermajority merger approval provision for certain business combinations. Namely, any merger with an “Interested Stockholder” (defined as a stockholder who beneficially owns 20% or more of the voting power of D’s outstanding voting stock) requires the approval of 67% or more of the voting power of the then-outstanding stock entitled to vote, unless approved by a majority of the disinterested directors or certain fair price and procedure requirements are met.