An unconfirmed report from a business publication in India says a tire manufacturer there is in the process of acquiring a controlling share in Findlay-based Cooper Tire & Rubber Co.
The Economic Times, an English-language newspaper comparable to the Wall Street Journal, reported Thursday that Apollo Tyres Ltd. is working to raise capital to purchase a controlling stake in Cooper. The newspaper said the deal could be in the $600 million to $800 million range.
The report cited unnamed sources with “direct knowledge” of the deal. It was quickly picked up by Reuters and other news agencies.
Ann Roman, Cooper Tire's vice president of communications and public affairs, told The Blade the company would not address the Economic Times story.
“Cooper Tire has a strict policy of not commenting on ... speculation in the market,” Ms. Roman said.
Cooper has about 1,050 hourly employees at its Findlay plant, which predominantly makes tires for light trucks. The company also has U.S. manufacturing plants in Mississippi and Arkansas. Cooper has factories in England, Mexico, and China and recently added a facility in Serbia. Cooper has nearly 13,000 employees worldwide and is the fourth-largest tire maker in North America and 10th largest in the world. It solely makes replacement tires.
Rod Nelson, president of the United Steelworkers Local 207, which represents Cooper’s hourly Findlay workers, said he had spoken with company officials, and he echoed their line that they don’t comment on market speculation.
“As far as the union’s concerned, there’s no concrete evidence to suggest this is factual,” he said. “At this time we’re only speculating it could be a rumor.”
Mr. Nelson also said it wouldn’t be the first time acquisition reports sprang up only to never materialize.
“I’ve had a history of 30 years at Cooper and this isn’t the first time a rumor like this has happened,” he said. “A few years ago it was Goodyear that was going to buy us. Before that, the Chinese. I’ve heard plenty of these rumors over the years. I’m not too concerned until we see actually fact instead of one article that started this going.”
The report did not make clear whether the supposed deal was being welcomed by Cooper’s board or if it would be a hostile takeover attempt.
Efraim Levy, an analyst with Standard & Poor’s who follows Cooper Tire, said Thursday's report was the first time he’d seen Apollo connected to interest in Cooper, and he said it was important to note that it was an unconfirmed report.
If a deal were to go through, Mr. Levy said, he would expect Cooper to remain a publicly traded company with Apollo as a large shareholder.
With Cooper’s push for international growth, Mr. Levy said he sees some potential benefit to Cooper if it were to align with Apollo.
If a deal is indeed in the works, Mr. Levy said, it’s likely that the company’s U.S. operations would be part of Apollo’s strategic rationale for buying into Cooper.
“Looking at the local opportunity, I don’t see a major job impact to employees of the company, at least not initially,” he said.
Apollo Tyres is based in Gurgaon, India. It has manufacturing facilities in Asia, Europe, and Africa. Its Web site says it has 16,000 employees.
Cooper's work force in Findlay approved a new, five-year contract in February after a 13-week lockout. The company agreed to a new four-year deal with its unionized workers at the Arkansas plant in January. The Mississippi tire plant is not unionized.
S&P reiterated a “buy” opinion on Cooper Thursday, with a target price of $23.
News of the potential deal sent shares of Cooper stock up as much as 11 percent Thursday, although the stock closed up 5.8 percent at $19.38.
Cooper had a profit of $254 million last year, including $209 million in the fourth quarter. The company reported a profit of $74 million for the first two quarters of this year, putting it ahead of last year's pace.
Contact Tyrel Linkhorn at: email@example.com or 419-724-6134.
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