Airgas formally rejected a takeover offer from Air Products and Chemicals on Tuesday, saying the $5.1 billion offer "significantly undervalues" the industrial gas company.

Allentown, Pa.-based Air Products made the unsolicited offer last Thursday. The offer is worth about $60 per share cash, a premium of about 38% over Airgas' closing share price before the offer was made. The deal also includes about $1.9 billion in debt.

In rejecting the offer, Radnor, Pa.-based Airgas said its shareholders are already poised to realize the benefits of an economic recovery and that its board has a "proven track-record of creating value."

"We can certainly understand why Air Products would find an opportunistic acquisition of Airgas to be appealing to Air Products and its stockholders," Chief Executive Peter McCausland said in a letter to Air Products CEO John McGlade. "However, it makes no sense for the Airgas stockholders to transfer the future value of Airgas to Air Products at a bargain basement price."

The Airgas board had already rejected two similar proposals. The first bid was all stock, while the second included stock and cash.