Peter McCausland (’74) and Daniel Neff Deliver the 2017 Max M. Shapiro Lecture
How to do well and do good in trying situations.
Boston University School of Law recently welcomed Peter McCausland (’74), CEO (ret.) and founder of Airgas, and Daniel Neff, partner at Wachtell, Lipton, Rosen & Katz to deliver the annual Max M. Shapiro Lecture. Titled “Bidders and Targets, Directors, Shareholders, and Advisors in Takeover Battles: When Does Zealous Advocacy Cross the Line?” the lecture focused on how Airgas, with Neff’s assistance, resisted a hostile takeover bid by a rival company.
Air Products, a competitor of Airgas in the industrial, medical, and specialty gas distribution industry, offered to buy the company in 2009. When Airgas’s board of directors rejected the offer as too low, Air Products took the bid directly to the company’s shareholders and attempted to re-engineer Airgas’s board by electing members who would be friendly to the merger.
As McCausland highlighted some of the events that took place throughout the takeover attempt, he stressed the difference between “doing well and doing good,” and what happens when others do not play by the same rules. Allegations of leaks to the media and other unethical behaviors led to a bitter two-year battle.
Neff discussed how Airgas responded to Air Products’ tactics as they resisted the takeover. When Air Products elected three new members to Airgas’s board, Neff and McCausland provided the three individuals with their own lawyer but not their own investor in an attempt to shield the board from potential ulterior motives. The impartial investor valued the company well beyond Air Product’s final offer.
In the end, Airgas succeeded in fending off the hostile takeover. Neff and McCausland noted how important the backing of a strong board of directors was to their success. While there is no perfect formula that can be taught through textbook procedures, they stressed the importance of fostering the right culture in a board of directors. “It’s hard to say why good boards are good,” McCausland said, “but it has to do with thoughtfulness and mutual respect and soft issues.”
When sources indicated that Air Products was going to initiate a second takeover, Neff and McCausland found a new buyer and negotiated a deal that included protection for Airgas’s 17,000 employees. Ultimately, the company sold for more than twice what Air Products was willing to pay—doing well and doing good for the company, shareholders, and employees.
Reported by Caroline Lambert (’19)
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