Air Liquide could buy U.S. assets but no Airgas bid

* Counterbid for Airgas seen unlikely by analysts

* Air Products/Airgas merger could prompt asset sales

* Air Liquide focus on emerging countries

* Full-year results due Feb. 15, seen flat

By Matthias Blamont

PARIS, Feb 11 (BestGrowthStock) – Air Liquide (AIRP.PA: ) is unlikely
to launch a rival bid for Airgas Inc (ARG.N: ), but sector
consolidation in the United States could throw up opportunities
for the French industrial gases group, analysts say.

Air Products and Chemicals Inc (APD.N: ) on Feb. 5 launched a
$5.1 billion hostile bid for Airgas that the target group
rejected several days later. [ID:nSGE61406A] [ID:nN09119866]

Yet Airgas stock has been trading above the $60 per share
offer price and market participants are looking for a takeover
fight echoing the drawn-out battle by cookies maker Kraft Foods
Inc (KFT.N: ) for Britain’s Cadbury Plc (CBRY.L: ).

They say Air Products’ John McGlade’s may have to sweeten
the bid to win over Airgas’s Peter McCausland. And there is
speculation too that a rival “white-knight” bidder may appear,
perhaps Air Liquide SA.

A spokesman for Air Liquide, headed by Benoit Potier and the
world leader in industrial gases, had no comment.

The French group, with a market capitalisation of 20.6
billion euros ($28.4 billion), bought Air Seperation of Tunisia
and Pacific Science Inc in the U.S. during 2009.

Its acquisitive stance has been underscored by the buy of
diabetes-oriented medical services firm DinnoSante, finalised at
the start of this month.

A combination of Air Products and Airgas could prompt asset
sales that might tempt Air Liquide, such the supply of smaller
quantities of air and gas to industrial clients — an area
dominated by Airgas and Praxair (PX.N: ).


“There are bound to be asset sales to obtain approval from
merger authorities and that could create opportunities for Air
Liquide”, said Jean-Pierre Dmirdjian of Oddo Securities.

“A counter-bid by Air Liquide on Airgas seems hardly likely
due to the debt level,” the analyst added — an opinion shared
by many analysts who estimate the group’s net debt at 5.4
billion euros on shareholder funds of just above 7 billion.

“I do not exclude that Air Liquide could be interested in
assets that Air Products or Airgas could put on the market,
probably in an auction as others like Praxair could also be
interested”, said Juergen Reck, analyst at Oppenheim.

The last big consolidation move in the industrial gas sector
was in 2006 when Linde AG (LING.DE: ), now number two in the
world, bought Britain’s BOC for some 12 billion euros.

Air Liquide already generates 20 percent of revenue in
emerging economies. In China, demand for oxygen has exploded as
it is used for the gasification of coal and it is expected to
double between now and 2015.

Air Liquide will publish annual results on Feb. 15.

According to the Thomson Reuters I/B/E/S consensus, analysts
expect on average a net profit of 1.18 billion euros on sales of
12.24 billion in 2009. The company said in October it saw the
full-year results close to the pervious year when it had sales
of 13.1 billion and a net profit of 1.22 billion.

Air Liquide shares are trading a about 17.5 times expected
2009 earnings, which is higher than 16.7 for Linde and 16.4 for
Praxair, while the sector average is 11.31.

Investment Analysis

(Writing by Marcel Michelson; Editing by David Holmes)
($1=.7251 Euro)

Air Liquide could buy U.S. assets but no Airgas bid