Apollo's $2.2-bn takeover of Cooper heads for trial
Trial begins here on Tuesday to decide the fate of the proposed $2.2 billion (about Rs. 13,461.8 crore) takeover of Cooper Tire by Apollo Tyres.business Updated: Nov 04, 2013 23:51 IST
Trial begins here on Tuesday to decide the fate of the proposed $2.2 billion (about Rs. 13,461.8 crore) takeover of Cooper Tire by Apollo Tyres.
Cooper Tire sued the Indian company for failing to finish the purchase deal announced in June. Apollo was supposed to close the process on October 4. But it didn't.
According to the June announ­cement, Apollo was to buy Cooper, which is America's fourth-largest tyre maker, for $35 a share. It is now trading at $26 per share.
Apollo refused to comment saying the matter was in court.
But it is understood to have citied essentially two reasons for not closing the deal: no agreement yet with Cooper's labour union, and insufficient information on Cooper's China unit.
Cooper has said it reached a tentative agreement with workers represented by United Steelworkers union. Apollo called it a "last-minute stunt", according to Reuters.
The US company believes, according to published reports, that Apollo is dragging its feet to renegotiate the deal, to force down the buying price from $35 a share.
A Delaware state court will decide in the trial starting on Tuesday if Apollo did enough to reach an agreement with the unions, as per the agreement announced in June.
If it wins, the company can either seek a new buying price, or walk away without having to pay a breakup fee of $112.5 million.