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JEREMY HOBSON: As earnings season continues we’ll hear today from Airgas a major seller of argon and helium. Airgas is trying to fend off a takeover by its rival — Air Products and Chemicals.
And as marketplace’s Jennifer Collins reports this battle will have broad implications for corporate deals.
Jennifer Collins: Air Products is trying to takeover Airgas. Airgas wants to stay independent. It’s defending itself with something called a “poison pill.” The poison pill is this complex tactic that would increase the number of Airgas shares and make a takeover prohibitively expensive.
Law professor Lynn Stout says without the poison pill, Airgas would have trouble fending off the hostile takeover.
Lynn Stout: The board of directors would lose control of the company to a new board that has interests that are very short term in nature.
The poison pill has been around for nearly 30 years and was intended to protect shareholders. But Larry Harris of the University of Southern California says it protects top brass at a company even if its performance isn’t up to snuff.
Larry Harris: So it’s quite likely that if the poison pill were dropped, that we would see more efficient production in the United States, which is good for all of us.
A Delaware court is expected to rule on the case in the next few weeks.
I’m Jennifer Collins for Marketplace.
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