Oct 15, 2013, 10.35 PM IST
Last week, Apollo's demand for a price reduction in the deal, citing problems related to the US firm's operations in China and concessions to the union, was rejected by Cooper.
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Declare Cooper deal conditions not met: Apollo to US court
Last week, Apollo's demand for a price reduction in the deal, citing problems related to the US firm's operations in China and concessions to the union, was rejected by Cooper.
Like this story, share it with millions of investors on M3
Declare Cooper deal conditions not met: Apollo to US court
Last week, Apollo's demand for a price reduction in the deal, citing problems related to the US firm's operations in China and concessions to the union, was rejected by Cooper.
The Indian company, responding to a complaint filed by Cooper Tire with the Delaware Court of Chancery on October 4, also denied allegations that it sought to delay an agreement with United Steelworkers (USW), which represents Cooper employees at facilities in Ohio and Arkansas.
"Apollo also filed a counterclaim seeking a declaratory judgement that the conditions precedent to the closing of the merger have not been satisfied," the company said in a statement today.
Apollo said it filed its reply and the counterclaim yesterday. The response detailed Cooper's failures to provide information required under the merger agreement due in part to its lack of control over Chinese subsidiary, Cooper Chengshan Tire, as well as Cooper's breach of several representations, warranties and covenants, it added.
The company said that "it has worked diligently to reach a settlement with the United Steelworkers to enable Cooper to overcome the United Steelworkers injunction prohibiting Cooper from consummating the merger."
"Apollo also asserted affirmative defenses, including that conditions precedent to closing had not been satisfied because the marketing period for the financing, central to Cooper's claims in its complaint, had never commenced and that Cooper has failed to meet its contractual obligations under the merger agreement," the statement said.
Last week, Apollo's demand for a price reduction in the deal, citing problems related to the US firm's operations in China and concessions to the union, was rejected by Cooper. In the deal announced in June, Apollo agreed to buy Cooper at USD 35 per share in an all-cash transaction that was to be completed by the end of this year.
According to Cooper, Apollo wanted a price renegotiation "far greater than the USD 2.5 reduction it had earlier proposed, and at one point referencing 'USD 8 or USD 9' per share." Cooper maintains that "the situations with the USW and the joint venture partner and union in China are a direct result of the merger agreement, and are risks Apollo assumed under the merger agreement."
The combined company would be the seventh-largest tyre manufacturer in the world with a presence in high growth end-markets across four continents.
On October 15, 2013, Apollo Tyres closed at Rs 65.05, down Rs 1.4, or 2.11 percent. The 52-week high of the share was Rs 101.50 and the 52-week low was Rs 54.60.
The company's trailing 12-month (TTM) EPS was at Rs 6.56 per share as per the quarter ended June 2013. The stock's price-to-earnings (P/E) ratio was 9.92. The latest book value of the company is Rs 46.24 per share. At current value, the price-to-book value of the company was 1.41.
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