For Immediate Release
Chicago, IL – June 3, 2010 – Zacks.com Analyst Blog features: Air Products & Chemicals Inc. (APD), Airgas Inc. (ARG), Sara Lee Corp. (SLE), Unilever (UL) and Procter & Gamble (PG).
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Here are highlights from Wednesday’s Analyst Blog:
Air Products-Airgas Saga Continues
Air Products & Chemicals Inc. (APD) has extended the expiration date of its tender offer for Airgas Inc. (ARG) for the second time, to August 13, 2010 from June 4, 2010. On April 1, 2010, Air Products had extended the expiration date for the first time from April 9, 2010 to June 4, 2010.
All other terms and conditions of the offer remain unchanged. Airgas is the largest U.S. distributor of industrial, medical and specialty gases, and “hard goods” such as welding equipment and supplies.
In October last year, Air Products had made a hostile bid for rival Airgas for an all-stock deal at $60.00 per share. Upon Airgas’ rejection, Air Products revised the tender offer to a “cash and stock” proposal with an implied value of $62 per share.
On rejection again by Airgas, Air Products upgraded its proposal for a second time to an all-cash deal of $60 per share of Airgas representing a premium of 38% from the closing price on February 4, 2010 and an 18% cash premium over the 52-week high. The total value of the transaction was approximately $7 billion, including $5.1 billion of equity and $1.9 billon of assumed debt. Airgas still believes that the proposal significantly undervalues the company.
Pennsylvania-based Air Products, however, argues that its proposal would prove beneficial to Airgas, which has a negative end-market outlook and an unfavorable earnings guidance. Airgas has no immediate strategic plan to enhance shareholders’ wealth.
Sara Lee Divests from Indian JV
Sara Lee Corp. (SLE) recently indicated that it has completed the sale of its 51% stake in Godrej Sara Lee Joint Venture to Godrej Consumer Products Ltd. in consideration for $230 million, putting an end to the 15-year old partnership. Godrej Sara Lee will now be known as Godrej Household Products.
Godrej Sara Lee has been the market leader in household insecticides such as Good Knight mosquito repellent and Hit. In fiscal 2009, the Joint Venture generated approximately $158 million in sales.
Sara Lee is also selling its global body care and European detergents businesses to Unilever (UL) and its air care business to Procter & Gamble (PG). The Unilever deal is expected to end by calendar-year 2010 and the Procter & Gamble deal is expected to close shortly after the end of the fiscal year in July.
The disposal of Sara Lee’s body care, European detergents, air care and Indian insecticides business leaves only the shoe care, non-European cleaning brands, and non-Indian insecticides businesses to be sold in its divestiture plan for the entire International Household and Body Care business segment.
All these divestitures will aid Sara Lee to streamline its focus more on the food and beverage business. Furthermore, the company intends to enhance shareholder return by using the proceeds to repurchase shares.
The spate of divestitures in the non-core assets would also augment the company’s growth via the strategic investment of these proceeds including accretive acquisitions.
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