Air Products and Chemicals said on Monday it raised its bid for Airgas to $5.5 billion, the latest salvo in its hostile bid for the rival company. The new Air Products cash offer of $65.50 a share represents a 3% increase from its previous bid of $63.50.

The company said the price would mark a premium of more than 50% to the Airgas closing price on Feb. 4, the day before the takeover drive began. Air Products had made a $60 a share bid for the company in February.

Airgas said its board will review the offer and advised stockholders to take no action at this time. If successful, Air Products would become the biggest industrial gas company in North America, and it could gain substantial benefits from the economy's resurgence as the recession abates.

Airgas, which has called previous offers "grossly inadequate," is scheduled to hold an annual meeting on Sept. 15 at which Air Products is hoping to have its nominees for the board elected.

Air Products, which supplies gases such as argon, helium and nitrogen to customers in the metals, chemical and pharmaceuticals sectors, wants Airgas for its large sales and distribution network and 1,500 sales representatives.

Airgas sells canisters of specialty gases to industrial and medical facilities, and buys much of its gas from Air Products. Air Products said that if Airgas shareholders do not elect its three nominees to the board at the meeting, it would terminate the offer and pursue "other attractive growth opportunities."