Update: Air Products Launches Hostile Bid for Airgas

Air Products took its $5.1 billion bid for rival Airgas hostile on Thursday by launching a tender offer for Airgas shares. The move, which was widely expected, is designed to exert pressure on the Airgas board and force the company to the bargaining table. At stake is the top position in the North American industrial gas market, which is poised to rebound once the recession abates.

Air Products offered $60 per share cash last week for Airgas. The deal also includes about $1.9 billion in debt. Airgas rejected that bid on Tuesday, saying it was far too low. It had already rejected two previous bids from Air Products.

An Airgas spokesman declined to comment on Thursday.

"This continuing refusal to discuss our compelling all-cash premium offer has left us with no alternative but to take the offer directly to Airgas shareholders," Air Products said in a statement.

However, Air Products may have a tough time reaching its goal. Under the terms of a "poison pill" shareholder rights plan, no investor can acquire more than 15% of Airgas shares without its board's approval.

A tender offer is an offer to purchase all outstanding existing shares of a corporation. Airgas Chief Executive Peter McCausland owns about 6.9 million shares, or about 10% of the company. Air Products owns about 1.5 million shares.