Leaders to gain in Cooper sale

Premium to be paid by Apollo worth estimated $7.1M for CEO

6/27/2013

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Bloomberg News

FINDLAY — Cooper Tire & Rubber Co. stockholders stand to cash in big with India-based Apollo Tyres set to acquire the company for a sizable premium.

Some of Cooper’s biggest shareholders: the company’s own top executives.

Roy Armes, Cooper’s chief executive officer, owned 277,060 shares of the company’s common stock as of Feb. 28, financial filings with the U.S. Securities and Exchange Commission show.

Mr. Armes also had unexercised purchase options on 246,554 shares of common stock, and owned 160,901 shares of restricted stock.

Under the terms of the deal, which was announced earlier this month, Apollo offered to pay stockholders $35 per share to acquire Cooper.

That makes Mr. Armes' shares worth almost $24 million.

As with most companies, some of Mr. Armes' shares are part of his compensation package, while others were purchased by him. He has been the company's CEO since Jan. 1, 2007.

The day before the Apollo deal was announced, shares of Cooper Tire closed at $24.56. At that price, the acquisition offer represented a 43 percent premium.

For Mr. Armes, that meant the value of his stock increased about $7.1 million, assuming all those held shares and shares available to purchase are sold.

An Apollo spokesman declined to comment on whether there would be any offer for Mr. Armes or other executives to convert their Cooper stock to shares in Apollo.

However, while Apollo is publicly traded in Mumbai, the company is not traded on any U.S. exchanges.

Full details of the transaction have not yet been released. When the deal was announced, the two companies said it was expected to be finalized in the second half of 2013, pending regulatory approval and approval by Cooper’s stockholders.

Other Cooper insiders with significant holdings include Bradley Hughes, the company’s chief financial officer, and Christopher Ostrander, the company’s North American Tire Operations president.

As of Feb. 28, Mr. Hughes had 149,497 shares and shares available to purchase. At $35 a share, those would be worth $5.23 million. Mr. Ostrander's 107,853 shares would be worth $3.77 million.

Several other executives control between 50,000 and 100,000 shares each.

Mr. Armes, Mr. Hughes, and Mr. Ostrander also have contract provisions that would provide them certain payments if they were to be terminated within two years of a change in control.

For Mr. Armes, that payment package was worth about $14 million at the end of 2012, according to documents filed with the SEC. Cooper’s other top executives have similar packages in the range of $2.5 million to $3.5 million.

Officials previously told The Blade that Cooper’s management team is expected to remain in place for the time being.

Cooper's stock closed at $32.79 on Wednesday.

Contact Tyrel Linkhorn at:

tlinkhorn@theblade.com

or 419-724-6134.