FINDLAY — A Delaware court has granted a request from Cooper Tire & Rubber Co. to hurry forward a hearing on a complaint it filed last week alleging its suitor in a $2.5 billion acquisition deal has been intentionally trying to stall the process.
The Delaware Chancery Court is expected to hear Cooper’s case next month. Cooper is asking the court to force Apollo Tyres Ltd. to quickly close the merger deal.
A company spokesman said Thursday that Findlay-based Cooper was pleased with the ruling and that the company remains committed the transaction.
“The strategic rationale for the pending merger with Apollo Tyres remains compelling, and we believe it will create value for all stakeholders. We look forward to closing the pending merger as soon as possible,” Cooper spokesman Anne Roman said.
Apollo Tyres, of India, set its sights on Cooper as way to grow its company in the United States and China, ultimately persuading Cooper’s board of directors to agree to sell the company for $35 per share. Cooper stockholders approved the deal Sept. 30.
However, cracks in underpinnings of the deal emerged later that week when Cooper filed its complaint. The company alleged that Apollo was “using its best efforts not to reach an agreement with the [United Steelworkers] and, consequently, is deliberately preventing the merger from closing.”
The USW represents about 2,500 employees at Cooper’s production plants in Findlay and Texarkana, Ark. An arbitrator has ruled that Apollo must have deals in place with the local bargaining units of those employees as a condition to close the purchase.
Apollo has yet to officially respond to Cooper’s complaint. However, the company said Thursday that it remains committed to the deal and is working with the union.
“We continue to believe strongly in the strategic rationale of the combination and, with actuarial advisers, are working as quickly as possible to assess the potential costs of a mutually acceptable agreement with the USW,” the company said. “We strongly disagree with the allegations and characterizations that Cooper made in its complaint and look forward to making our case before the Delaware court.”
Apollo has said it believes a price reduction is warranted because of unanticipated costs, though it has not said how much it seeks to knock off the per-share price.
In its complaint, Cooper said Apollo first sought a price reduction of $2.50 per share, then later suggested an even greater price reduction of as much as $9 per share.
Cooper does not believe a price reduction is warranted.
The merger also has stumbled over an issue with a majority owned joint-venture plant in China that Cooper owns through a subsidiary.
Work there has stopped on Cooper-branded tires because the workers object to the Apollo-Cooper deal. Also, Cooper has been unable to obtain certain financial records from the plant, further complicating the proposed deal.
Contact Tyrel Linkhorn at firstname.lastname@example.org or 419-724-6134.
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