The Airgas/Air Products war wages on. This week Air Products upped its offer by $2 a share, bringing the offer that started at $60 per share up to $65.50 per share. Shortly after, Airgas promptly reviewed and rejected the offer.

But this will not go on forever. Air Products CEO John McGlade says the company can take a hint: “If Airgas shareholders do not elect these three nominees and approve all of our proposals, we will conclude that shareholders do not want a sale of Airgas at this time—and we will therefore terminate our offer.”

But if you ask Airgas’ Peter McCausland, he’s not buying it: “We believe that Air Products’ threat to withdraw its offer if Airgas stockholders do not elect its nominees and approve its By-Law proposals is just another coercive tactic designed to facilitate the acquisition of Airgas at the lowest possible price.”

Just when it looked like a vote on September 15 could definitively determine Airgas’ fate, the situation is back up in the air. The latest subtext of the back-and-forth is that Airgas may seek other suitors. Says McCausland, “If the January Meeting Proposal does not receive support from a majority of the votes…our Board will explore all available alternatives to the grossly inadequate Air Products offer in order to enhance stockholder value.” According to Bloomberg, “alternatives” typically involves soliciting bids from other potential buyers. Could Airgas be up for sale?

If it seems as though Air Products will not give up, it may be because of the two companies’ history. Air Products sold its U.S. packaged gas business to Airgas in 2002. Now Air Products wants it back, by way of purchasing Airgas. McGlade explains, in a letter to Airgas employees:

“You might be wondering why we are looking to return to the U.S. packaged gas business now. In 2002, our U.S. packaged gas business had limited breadth and scope and at that time, we examined our strategic priorities and decided to exit that business in order to focus on other areas where we could grow and improve our company. Over the ensuing eight years, both Air Products and Airgas have grown significantly, and as we look to the future, we see packaged gas as a growth area for Air Products, both within North America and internationally.”

Even if you do not have a direct stake in this, the potential of a merger could have serious implications for the competition. John McGlade, in a letter to Airgas employees states, “The combined company would be the largest industrial gas company in North America and one of the largest globally.”

What impact do you think this will have on your company?

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If you’re anything like me, you don’t know what to make of the controversy between Airgas and Air Products. Air Products has been trying to acquire Airgas for about 10 months, and everything seems like a carefully played chess match leading up to Airgas’ annual meeting on September 15. As it approaches, I’ve been trying to get a grasp on everything that has taken place.

The feud has now made its way into a New York Times blog from UConn Law Professor Steven M. Davidoff, which dissects the latest moves by each party involved and their potential implications. Why did Airgas send a letter to the Delaware court? Why exactly is Air Product proposing a bylaw amendment to move Airgas’ next annual meeting all the way up to January 2011? Davidoff puts it in terms you can wrap your head around. NB – It’s infused with Davidoff’s opinion, so don’t take it all as fact.

Last week, Airgas sent a letter to its shareholders stating, among many other things, “If Air Products truly wants to acquire Airgas, it knows what to do. It must offer a price that fairly compensates you—our stockholders—or terminate its efforts.”

The NYT blog brings up an important point that seems to draw on this statement: “Whether Airgas intended it, the events of this week tell the market that it certainly is for sale at the right price.”

Is a takeover imminent? What impact do you think it will have on other distributors if it happens?