Air Products has ended its yearlong takeover attempt of Airgas Inc., following a federal court ruling that the Airgas board acted within its rights to block shareholders from voting on the proposal. "We are disappointed by the court's decision,” stated John E. McGlade, Air Products chairman. “We believe the Airgas board of directors has done a great disservice to Airgas shareholders by never allowing them to decide for themselves whether they want to accept our $70 per share all-cash offer. It is abundantly clear that the Airgas Board is thoroughly entrenched in its position, so we have decided to withdraw our offer and move on."

Last February, industrial-gas supplier Air Products proposed a $5.1-billion acquisition of Airgas, an industrial and specialty gas distributor and retailer. It said the combination would form North America's largest integrated-gas company, cut overhead costs, and increase market reach.

The Airgas board generally ignored the Air Products proposal, refusing to negotiate a takeover price, and angering many of the company’s investors.

In September 2010, Air Products increased its bid to $5.5 billion. It also put forth a slate of candidates for the Airgas board of directors. Airgas shareholders approved the Air Products nominees, and also approved an amendment to the company’s bylaws that would lead to another board meeting, at which the takeover proposal was to be considered.

Airgas challenged the validity of the bylaw amendment, and in turn Air Products and Airgas shareholders sued the Airgas board over its use of a “poison pill” takeover defense, which they claimed prevented shareholders from receiving the fair value of their investment.

The Delaware judge upheld the Airgas poison pill plan, and said the Airgas board was within its rights to prevent its shareholders from voting on Air Products' takeover bid. He ruled that the Airgas directors acted in good faith and did not breach their fiduciary duties to shareholders by withholding a shareholder vote on what they considered to be an inadequate offer.

McGlade said that acquiring Airgas at an appropriate price would have been a value-creating opportunity for Air Products, but it said the company has “many other compelling growth opportunities around the world that we are continuing to pursue.

“Our business is performing extremely well as evidenced by our most recent results,” he said, “and we remain focused on executing against our strategic plan and delivering strong results for our shareholders."