M & A Law Prof Blog

Editor: Brian JM Quinn
Boston College Law School

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Friday, December 3, 2010

Chancellor Chandler and Airgas...

I don't know, but I think Chancellor Chandler isn't all that impressed with the Supreme Court reversing his decision in the Airgas case.   He sent a letter to the parties yesterday (Letter here) with a number of questions seeking supplemental information relevant to the next part of the case - the redemption of Airgas' pill.  To give you a sense of how he is feeling, here's question number 7:

Please identify specific evidence in the record bearing upon the Airgas stockholder profile that suggests that the Airgas stockholders are unable to  make a decision for themselves or that suggests that Airgas stockholders are vulnerable to mistakenly rejecting the Airgas board’s advice about the firm’s  alleged higher intrinsic value.  In other words, what evidence in the record developed during the trial in this case indicates or suggests that Airgas stockholders are likely to accept an inadequate offer? 

I recognize that the Delaware Supreme Court apparently has concluded that stockholders may be simultaneously intelligent enough to decide whether to oust directors from office but not intelligent enough to decide whether an offer to purchase their property is in their best economic interest,[...] but exactly what is it about the Airgas stockholders (or about the Airgas business strategy, or about the Air Products tender offer) that would make the Airgas stockholders uniquely incapable of properly making an economic judgment in their own self- interest?

I guess he's not all that impressed with the Supreme Court's opinion.  In another question, Chandler suggests asks for arguments why, if the only issue is price, shouldn't shareholders be permitted to decide on their own whether to take the offer, particularly since Airgas hasn't offered them an alternative.  Interco anyone?  [But see Time.]

OK, OK, I've learned my lesson about prognosticating too much with this case.  But, could Chandler, in a pique, order Airgas to pull its pill?   I know it's a low probability, OK, a really low probability and highly unlikely, sure.  Still ... who predicted that the Supremes would reverse the trial opinion?  I'm assuming nothing.  But yet, it's another reason to keep paying attention to this case.

-bjmq

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