15 October 2013 20:19 [Source: ICIS news]
HOUSTON (ICIS)--Apollo Tyres has filed a counterclaim in a Delaware court against takeover target Cooper Tires and denied allegations that it is dragging its feet on the previously agreed-to merger, the India-based tyre producer said on Tuesday.
Apollo said that it filed its counterclaim on Monday after the US producer asked the Delaware court last week to make Apollo close the deal, which was to have occurred by 4 October, the company said.
Cooper stockholders approved the tyre manufacturer’s $2.5bn ($1.9bn) merger with Apollo in September after a deal was reached in June. The deal was agreed to be an all-cash transaction, with Cooper stockholders receiving $35/share in cash, a 40% premium to Cooper’s 30-day volume-weighted average price.
But Apollo has breached the acquisition contract by working for a lower per-share price based on situations with contract negotiations with United Steelworkers in the US as well as a strike involving a Cooper joint venture in China with Chengshan Group, Cooper said last week in a statement.
“The situations … are a direct result of the merger agreement and are risks Apollo assumed under the merger agreement,” Cooper said.
In court documents filed on Monday, Apollo refuted the allegations and said it “has worked diligently with the United Steelworkers to enable Cooper to overcome the United Steelworkers injunction prohibiting Cooper from consummating the merger”.
Apollo said its counterclaim seeks a declaratory judgment that the conditions precedent to the closing of the merger have not been satisfied.
The Indian company said Cooper failed to provide required information under the merger agreement due in part to its lack of control of the Chengshan joint venture and has breached other parts of the agreed-to deal.
Both companies maintain that they would like to resolve their issues and complete the merger, which both have said would result in the world’s seventh-largest tyre manufacturer.
($1 = €0.74)
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