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Delaware Court of Chancery Declines to Order Redemption of Airgas Poison Pill
February 16, 2011
In Air Products v. Airgas, the Delaware Chancery Court has declined to order the board of directors of Airgas to redeem its poison pill. The Court applied Delaware's long-standing Unocal standard of review and found that the Airgas board had reasonably identified a threat to the corporation that warranted a defensive response (the threat being that the price offered for Airgas by Air Products was inadequate, but attractive enough to short-term stockholders, such as arbitrageurs or event-driven investors, for them to accept the offer and forego the potential higher value of continuing to own the company under present management's plan), and that the board's actions (including maintaining the poison pill) were reasonable and proportionate to the threat identified.