Cooper Tire to try to save Apollo Tyres deal
ERJ staff report (TP)
Findlay, Ohio − Cooper Tire & Rubber will make a last-ditch effort to save its sale to Apollo Tyres on 19 December, as it seeks a ruling from Delaware Supreme Court that could force the Indian company to complete their proposed $2.3bn (€1.7bn) merger, reported Reuters.
Apollo, which would become the world's seventh-biggest tire maker, wants to pay less than the $35 (€25.9) per share agreed in June because of demands by unions at Cooper plants and disruptions at Cooper's venture in China.
Cooper wants the Supreme Court to overturn a ruling by a judge on the lower Court of Chancery who found last week that Apollo had not breached its obligations under the deal. A new ruling would have to be issued by 31 December, when the merger agreement allows Apollo to walk away.
Apollo declined to comment. Cooper did not immediately respond to requests for comment.
The Chancery judge, Sam Glasscock, had rejected Cooper's allegation that Apollo was falling short of its requirement under the deal to reach new contract terms with unions at Cooper plants in Ohio and Texas.
Cooper also wants the Supreme Court to issue a declaration that Apollo is in breach of the merger. That would allow the fourth-largest North American tire maker to return to Glasscock's court and ask for an order directing Apollo to close.
Apollo has argued Cooper is actually the one who has not kept up its end of the bargain.
As the Indian company sees it, Cooper is at fault because it has been locked out of its Chinese joint venture. Without information from the venture, which accounts for a quarter of Cooper's business, the US company failed to report its financial data by Thursday (14 November) as required for Apollo to get financing.
Cooper has argued that the Chinese lock-out and labour problems would never have happened without the merger agreement. Risks associated with the deal were taken on by Apollo and should have been baked into its bid, according to Cooper.
The parties have agreed to have the dispute decided in Delaware's courts, which have a reputation for handling complex business disputes quickly.
In October, Delaware's Supreme Court issued a ruling from the bench to reverse a Court of Chancery order that had blocked an $8.2bn (€6.07bn) deal between Vivendi SA and Activision Blizzard.
The merger would deliver a significant premium to Cooper shareholders. Shares of Cooper ended slightly lower at $23.86 (€17.66) on Friday (15 November) on the New York Stock Exchange.
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Full story from Reuters