Industrial gas supplier Airgas said it is willing to negotiate a buyout by rival Air Products at a price greater than $70 per share, or $5.86 billion, more than 7% higher than the offer on the table. This is the first time Airgas has provided a specific monetary amount from which it is willing to open negotiations.

In turn, Air Products on Wednesday extended its $5.5 billion hostile tender offer for rival industrial gas company Airgas until Dec. 3.

Air Products, which serves customers in the metals, chemical and pharmaceuticals sectors, wants Airgas for its large distribution network and 1,500 sales representatives.

If successful in its quest for Airgas, Air Products would become the biggest industrial gas company in North America, though so far Airgas has repeatedly rebuffed Air Products' offers, leading to a hostile takeover attempt.

Earlier on Tuesday, Airgas' board, which includes three members nominated by Air Products, again rejected Air Products' offer as inadequate.

"Our board is unanimous in its willingness to authorize negotiations with Air Products if Air Products provides us with sufficient reason to believe that those negotiations will lead to a transaction at a price" higher than $70 per share, Airgas Chairman John van Roden said in a letter to Air Products Chairman John McGlade.

Air Products said in a statement late on Tuesday "there is nothing in the Airgas earnings or letter that changes our view of value."

Air Products again called on Airgas' board to "let shareholders decide for themselves."

"It's not surprising to me that the three new directors, once they got inside Airgas ... would come to the same conclusion" as the rest of the board, Airgas Chief Executive Officer Peter McCausland told Reuters.

McCausland, who founded Airgas, lost his seat as chairman when the three new directors were elected last month. He remains Airgas' largest individual shareholder, but said he had no plans to try and regain the chairmanship.

Chairman van Roden "is helping me deal with this hostile takeover attempt," McCausland said. "The help is certainly welcome."

Van Roden has been an Airgas board member since October 2006.

Many saw McCausland's removal as a de facto acceptance by Airgas shareholders of the $65.50-per-share cash offer from Air Products.

Given that, it's interesting that the Airgas board continues to insist on a higher offer, Morningstar analyst Basili Alukos said.

"The demand for a higher offer shows, to a degree, that the new chairman truly is independent," Alukos said. "I'm wondering if it's not the same potential end that would have happened if Peter McCausland would have remained chairman."

Earlier this month a Delaware Chancery Court judge refused to throw out a new Airgas bylaw that will advance the company's annual meeting by eight months, to January, when shareholders could approve three more members to the Airgas board. If the three win election, Air Products would take control of the board.

Airgas has said it would appeal the judge's ruling.

For the second quarter ended on Sept. 30, Airgas reported net income of $66.6 million, or 78 cents per share, up from $54.5 million, or 65 cents per share, a year earlier.

Excluding one-time items, Airgas earned 83 cents per share. By that measure, analysts expected 82 cents, according to Thomson Reuters I/B/E/S.

Sales rose 10% to $1.06 billion, meeting analysts' expectations.

For the fiscal third quarter, Airgas forecast adjusted earnings per share of 76 cents to 80 cents. Analysts expect 80 cents per share.

For fiscal 2011, Airgas expects adjusted earnings per share of $3.22 to $3.32. Wall Street expects $3.26 per share.

France's Air Liquide, an international rival of both Airgas and Air Products, said on Tuesday that third-quarter sales rose 15% due to a recovery in Europe and North America.