ERJ staff report (RN)
Washington − Cooper Tire & Rubber has filed a notice with the Securities and Exchange Commission (SEC), telling them that its third-quarter 2013 financial results will not be issued today (14 November) as expected, reported Rubber News.
As of 12 November, Cooper still did not have the financial information from Chengshan (Shandong) Tire Co. Ltd. (CCT), Cooper's Chinese joint venture operation, that it needed to complete the Form 10-Q for the quarter ended 30 September, Cooper said in a Form NT 10-Q dated 12 November.
Following Cooper's 12 June announcement of its merger with Apollo Tyres, employees at CCT walked out, demanding the merger's termination, Cooper said in the document. The workers returned to the job 17 August, but only to make non-Cooper-brand tires, Cooper said.
"The company is currently evaluating its options for resolving this matter," Cooper said. "Until it obtains satisfactory information from the joint venture, the company will not be able to file the Form 10-Q."
Cooper will file the 10-Q as soon as it has the necessary information from CCT, it said.
The unrest at CCT and the late filing of Cooper's third-quarter results are major issues in the proposed merger between Cooper and Apollo. Cooper filed a lawsuit in Delaware Chancery Court 4 October, trying to force Apollo to agree to the original, $35-per-share (€26.05) terms of the agreement.
In turn, Apollo cited the trouble at CCT and the late filing of third-quarter results as reasons for seeking a lower per-share price. Cooper had pitched CCT to Apollo as an easy way to enter the Chinese tire market, Apollo said. Apollo also said it does not believe, as Cooper claims, that the proposed merger caused its lack of control over CCT, in which Cooper owns a 65-percent share.
On 8 November, Judge Sam Glasscock III of the Chancery Court issued a partial bench ruling, finding that Apollo had not breached the terms of the merger agreement. If Cooper didn't issue its third-quarter financials by 14 November, Glasscock said, it would no longer have standing to seek special performance of the agreement.
Cooper has appealed Glasscock's decision to the Delaware Supreme Court. "While an inability to issue third-quarter results might affect the availability of the current financing, it does not provide Apollo with any ground for avoiding its obligations under the merger agreement," Cooper said.