The takeover battle for Airgas Inc. is centered in a Delaware court room this week, as Airgas contests the move by Air Products and Chemicals to execute its authority over the industrial and specialty gas distributor and retailer.

Air Products is an industrial gas supplier that proposed a $5.1-billion acquisition of Airgas in February, setting in motion a nine-month stand-off over the valuation — and later the process. The Airgas board generally ignored the Air Products proposal, refusing to negotiate a takeover price, and angering many of the company’s investors.

Last month, on the eve of the Airgas annual meeting, Air Products increased its bid to $5.5 billion. It also put forth a slate of candidates for the Airgas board of directors. Shareholders approved the Air Products nominees, and also approved an amendment to the company’s bylaws that would lead to another board meeting in January 2011.

Airgas is challenging the validity of that bylaw amendment as part of the ongoing case.

Air Products and Airgas shareholders are suing the Airgas board over its use of takeover defenses, which they claim are preventing shareholders from receiving the fair value of their investment. In addition, Airgas is suing Air Products over changes to Airgas's bylaws that shareholders approved at the meeting last month.

So far, Airgas executives have defended their decision not to consider the Air Products proposal by saying it is too low, though asserting they have a value in mind at which they will accept the approach.

The results of the ongoing trial may have a wider impact: the corporate bylaws covering directors prerogatives for considering takeover proposals, and for scheduling shareholders meetings, are the same Delaware state rules that apply to many of the largest U.S corporations.

Editor's note: This is an revised version of an earlier report.