Airgas' (ARG) board of directors rejected an increased buyout bid of $65.50 a share, or $5.48 billion, from larger competitor Air Products & Chemicals (APD), noting that even after the bidding price had been sweetened, it still failed to account for the cost savings Air Products would realize by acquiring Airgas, as well as the share-price appreciation seen by other industrial gas companies over the past several months.

Air Products, which has a market value of about three times that of Airgas, started making unsolicited proposals to buy Airgas late last year. In February, it bid $60 a share for the company. Then, earlier this week, it raised its bid to $65.50 a share.

As Airgas' board pointed out in a letter to shareholders today, the share prices of three other industrial gas companies have risen an average of 18% since February, while Air Products' bidding price has risen just 9.2%.

The board unanimously rejected Air Products' bid while advising shareholders to vote for Airgas' directors and against an Air Products' bylaw amendment proposal at a Sept. 15 stockholder meeting.