Air Products And Chemicals, Inc. · NYSE:APD
Air Products And Chemicals — Proxy Contest (September 2010)
25 slides from Air Products And Chemicals's proxy contest presentation, Sep 7, 2010
Slide 1: Schedule 14A Soliciting Material
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 14A (Rule 14a-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. __) Filed by the Registrant o Filed by
Slide 2: Air Products Offer for Airgas
Air Products Offer for Airgas September 2010
Slide 3: Forward-Looking Statements
Investor Presentation Forward-Looking Statements All statements included or incorporated by reference in this communication other than statements or characterizations of historical fact, are forward-looking statements. These forward-looking statements are based on our current expectations, estimates
Slide 4: Additional Information
Investor Presentation ADDITIONAL INFORMATION On February 11, 2010, Air Products Distribution, Inc. (“Purchaser”), a wholly owned subsidiary of Air Products and Chemicals, Inc. (“Air Products”), commenced a cash tender offer for all the outstanding shares of common stock of Airgas, Inc. (“Airgas”) no
Slide 5: Situation overview
Investor Presentation Situation overview 4
Slide 6: Our offer for Airgas
Investor Presentation Our offer for Airgas Consideration • $65.50 per share, all-cash Premium • 50% premium to Airgas unaffected price on 02/04/10 of $43.53 Financing • Fully-committed through J.P. Morgan • Reached agreement with FTC on terms of a Consent Decree - announced Regulatory August 16th Ap
Slide 7: Airgas refuses to engage despite our efforts
Investor Presentation Airgas refuses to engage despite our efforts 1 10/15/2009: McGlade and McCausland meet; McGlade 9 06/21/2010: Airgas files preliminary proxy, urges shareholders to indicates Air Products' interest in pursuing a business vote for three incumbent directors combination 10 07/08/20
Slide 8: Airgas' delay tactics not in shareholder interests
Investor Presentation Airgas’ delay tactics not in shareholder interests • Airgas’ first action in response to our public offer was to pursue litigation • Airgas has refused to discuss any aspect of our offers despite our clearly stated flexibility regarding price and form of consideration • Airgas
Slide 9: And Airgas continues to delay and act against shareholder interests
Investor Presentation And Airgas continues to delay and act against shareholder interests • On August 26, 2010, Airgas submitted a letter to the Delaware Chancery Court stating that it intends to seek to INVALIDATE ANY AFFIRMATIVE DECISION BY A MAJORITY OF AIRGAS SHAREHOLDERS to approve adoption of
Slide 10: Airgas is not strategic to other industrial gas players
Investor Presentation Airgas is not strategic to other industrial gas players Quotes Source Date “[Airgas] is really not that James Sawyer (CFO), strategic to us.” Morgan Stanley Global August 31, 2010 “Don’t see much growth in U.S. Industrials Unplugged packaged gases.” Conference “When we look at
Slide 11: Overview of Offer for Airgas
Investor Presentation Overview of Offer for Airgas 10
Slide 12: Compelling valuation multiple
Investor Presentation Compelling valuation multiple Airgas implied firm value and multiples Unaffected Air Products' ($ in millions, except per share Airgas current amounts) offer Share $43.53 $65.50 price shares outstanding (mm) Diluted 84.5 86.7 Equity $3,679 $5,676 value Add: Net $1,849 $1,663 de
Slide 13: Compelling valuation multiple relative to precedent transactions
Investor Presentation Compelling valuation multiple relative to precedent transactions Precedent transaction values and multiples Transaction value Transaction value/ Ann. Acquiror Target (Parent) ($bn) LTM EBITDA date 01/08/07 Air Products BOC Gazy Sp Industrial $0.5 9.7x Gas 01/24/06 Linde BOC Gro
Slide 14: Compelling premium to every metric
Investor Presentation Compelling premium to every metric Current Offer Premium: $65.50 50% 149% 28% 56% 42% 22% $53.61 $51.00 $46.00 $43.53 $42.11 $26.29 Current Pre- Pre- Pre- Pre- Recent PV of consensus offer announcement stock price announcement 52 week low announcement 52 week high announcement
Slide 15: Premium is significantly higher than precedents
Investor Presentation Premium is significantly higher than precedents 50% 30% 28% 28% 26% 25% 16% 17% Current U.S. all U.S. all- U.S. all- U.S. all U.S. Global all Global offer deals cashdeals stock deals friendly deals all unsolicited friendly deals all unsolicited deals deals Source: Dealogic Anal
Slide 16: Premium compelling even after reflecting change in peer share prices
Investor Presentation Premium compelling even after reflecting change in peer share prices since initial offer From February 4, 2010 to August 27, 2010 50% 17% 14% 14% 12% Current Peer Praxair Air Linde offer average Liquide Source: FactSet Note: Market data as of 08/27/10; red bar reflects unaffect
Slide 17: Growth from emerging markets is driving peer performance while Airgas is a U.S business
Investor Presentation Growth from emerging markets is driving peer performance while Airgas is a U.S business Airgas Praxair FY 20101 Sales FY1Q11 vs. FY1Q10 (% FY 2009 Sales2 2Q10 vs. 2Q09 (% growth) growth) Rest of Asia World 10% 26% 2% S. America US North America 7% 19% 12% 98% 55% 11% Total Euro
Slide 18: Airgas' CY 2012 earnings forecast is based on aggressive sales growth assumptions
Investor Presentation Airgas’ CY 2012 earnings forecast is based on aggressive sales growth assumptions Assumes same store sales (SSS) growth rate of 7%, higher than the 6% SSS growth rate achieved in the significantly stronger 2003 - 2005 recovery • Current economic recovery is weaker than 2003 - 2
Slide 19: Analysts put Airgas' full value below current market price
Investor Presentation Analysts put Airgas’ full value below current market price - not a single analyst “Buy” rating Airgas Price Analyst Standalone Analyst Firm Name Date at Report Recommendation Valuation Date Laurence Alexander Jefferies 08/24/10 $66.45 Hold $45.00 Jeffrey Germanotta William 07/2
Slide 20: Path forward
Investor Presentation Path forward 19
Slide 21: Air Products' proposals
Investor Presentation Air Products’ proposals 1. Election of three independent director nominees 2. Amend bylaws to implement director eligibility requirements • Would make any Airgas board members (except CEO) not elected at annual meeting ineligible to serve on Airgas Board for three years • If no
Slide 22: Director nominees have exceptional backgrounds
Investor Presentation Director nominees have exceptional backgrounds • John P. Clancey − Age 65 − Chairman Emeritus, Maersk Inc. − Former President and Chief Executive Officer, Sea-Land Service, Inc. − Principal and founder, Hospitality Logistics, International − Former Director, UST Inc. − Former D
Slide 23: Only Airgas' Management and Board believe our price is "not even close"
Investor Presentation Only Airgas’ Management and Board believe our price is “not even close”, but… The market believes we are close on price • Stock has traded at a volume-weighted average price of $62.58 prior to our July 8th increase and at a volume-weighted average price of $65.35 since our July
Slide 24: We are prepared to close this transaction immediately
Investor Presentation We are prepared to close this transaction immediately but we need the support of Airgas’ shareholders • No meaningful hurdles to completing our transaction − No closing risk given our recent agreement with the FTC − No financing risk given our fully committed financing from J.P
Slide 25: Now is the time for Airgas' shareholders to realize the value of our offer
Investor Presentation Now is the time for Airgas’ shareholders to realize the value of our offer We ask for a vote “FOR” Air Products’ nominees and our other proposals 24
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