RADNOR, Pa. (AP) — Airgas Inc. on Wednesday rejected a sweetened buyout offer from competitor Air Products & Chemicals Inc. and reported that its fiscal first-quarter earnings rose 18 percent.
The industrial gas maker also boosted its quarterly dividend and raised its earnings forecast for the year.
Air Products offered to buy Airgas for $5.5 billion in cash, or $63.50 per share. Air Products had also agreed to take over about $1.7 billion in Airgas debt as part of the deal. The offer represents a premium of nearly 50 percent over where Airgas shares were on Feb. 4, the day before Air Products' original buyout offer of $5 billion in cash and the assumption of $1.9 billion in debt.
Air Products' original offer was extended in June for another two months, but Air Products grew impatient in early July and raised its offer to $5.5 billion.
Airgas still thinks it's worth much more.
In a statement Wednesday, Air Products said it was "disappointed" and reiterated its stance that the tie-up would be the best move for Airgas. The combination would create one of the biggest industrial gas companies in the world.
Airgas, based in Radnor, Pa., earned $64.8 million, or 76 cents per share, in the fiscal first quarter ended in June, compared with $54.8 million, or 66 cents per share, in the same period a year earlier.
Revenue climbed to $1.05 billion from $982 million.
The results topped analysts expectations. Analysts polled by Thomson Reuters expected profit of 72 cents per share on revenue of $1.03 billion.
Airgas said conditions are improving in most segments, led by manufacturing.
The company raised its earnings forecast for fiscal 2011 ending in March from a range of $2.95 to $3.05 per share to a range of $3.15 to $3.30 per share. Analysts predict income of $3.04 per share.
For the fiscal second quarter, Airgas expects income of 78 cents to 82 cents per share. Analysts forecast income of 77 cents per share.
In another sign of confidence in its business, Airgas' board raised its quarterly cash dividend to 25 cents from 22 cents. The dividend will be payable on Sept. 30 to shareholders of record as of Sept. 15.
Shares of Airgas dipped 36 cents to $64.80 in midday trading. Air Products shares fell 79 cents to $69.98.
