12 November 2013 16:37 [Source: ICIS news]
HOUSTON (ICIS)--Cooper Tires has appealed a Delaware judge’s recent partial ruling in a case centred on the US producer’s merger deal with India’s Apollo Tyres, Cooper announced on Tuesday.
On 8 November, Delaware Chancery Court Vice Chancellor Sam Glasscock ruled that Apollo did not breach its obligation to expeditiously reach an agreement with a US union as part of the companies’ agreed-to merger.
Cooper on Tuesday said that Glasscock’s ruling “misconstrues the contract between Cooper and Apollo”. The US producer did laud the judge’s decision that Apollo must “use its best efforts” to come to an agreement with the United Steelworkers.
The judge said last week that he would rule by Wednesday on whether Cooper can force Apollo to accept the agreed-to deal of $35/share.
Apollo said on Friday in a media statement that it was pleased with last week’s ruling and looked forward to “finding a sensible way forward”.
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 Cooper has argued that 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.
Apollo has disputed 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”.
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 = €0.75)
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