ERJ staff report (TP)
Delaware − Cooper Tire & Rubber’s argument to force a $2.5bn (€1.8bn) takeover by Apollo Tyres centres on the reluctant suitor’s insistence that the price be reduced, Cooper said in Delaware Supreme Court papers, reported Phil Milford for Bloomberg.
The company’s lawyers will argue at a 19 December hearing that Apollo violated the merger contract by insisting that any agreement with the United Steelworkers union include reduction of the previously agreed-upon $35 (€25.4) a share, court papers show. Cooper shares last week were trading below $24 (€17.4).
“Apollo’s attempt to use its negotiations with the USW to extract a price reduction from Cooper constituted a material breach of the merger agreement,” Cooper said in a filing last week.
Cooper, based in Findlay, Ohio, said on 12 June that it would be bought by Apollo. It sued Apollo to enforce the buyout after the Gurgaon, India-based company failed to close the deal.
After a Delaware Chancery Court trial in November, Judge Sam Glasscock III ruled that Apollo didn’t breach its contractual obligation to use its best efforts to resolve disputes with the union and he couldn’t order Apollo to complete the buyout.
Cooper appealed to the state’s high court, contending that Glasscock erred and that Apollo’s “selfish desire” and insistence on a price break constitute a violation.
Apollo should complete the deal at $35 (€25.4) or pay a $112.5m (€81.6m) “reverse breakup fee” to walk away, Cooper said.
Apollo’s briefs for the hearing were filed under seal and aren’t available to the public.
The cases are Cooper Tire & Rubber Co. v. Apollo (Mauritius) Holdings Pvt, CA8980, Delaware Chancery Court (Wilmington) and 624-2013, Supreme Court of Delaware (Dover).
This is an external link and should open in a new window. If the window does not appear, please check your pop-up blocking software. ERJ is not responsible for the content of external sites.
Full story from Bloomberg