Apollo and Cooper Tire exchange swipes over merger
After Cooper Tire filed a complaint in Delaware Chancery Court that it’s merger partner, Apollo Tyres, wasn’t moving fast enough, Apollo replied with the following statement. Also, India-based Apollo called for a reduction in the offer price for the merger, which has been valued at $2.5 billion. Cooper’s response follows, which pretty much says, it doesn’t think so.
“Apollo remains firmly of the belief that a merger with Cooper is compelling from a strategic perspective. Contrary to Cooper’s complaint, we have been working diligently to address significant post-announcement impediments…We continue to have committed financing from four major international banks and are ready to launch our financing, subject to reaching agreement with the USW, which is a requirement before Cooper can close under the September 13 arbitration ruling. Apollo has indicated to the USW in discussions over the past two weeks that Apollo is willing to make material concessions to the USW, subject to arranging for additional financing or financial concessions. Cooper had been unwilling to provide similar terms to the USW in negotiations over the three month period before its arbitration setback…It remains Apollo’s sincere desire to reach a satisfactory resolution on all matters and proceed with closing its acquisition of Cooper.”
Not willing to let that go unanswered Cooper just issued the following statement:
As outlined in the complaint filed Friday, Cooper is acting in the best interests of our shareholders, who overwhelmingly approved the pending merger with Apollo for $35 per share. Cooper has not agreed that a reduction in share price is warranted. We are pleased that Apollo shares Cooper’s commitment to the strategic merits of the transaction. 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. We believe that the situation with the USW can be resolved in a timely manner and ask that Apollo proceed expeditiously toward resolution with the USW, working with Cooper.
With respect to China, Cooper explained in the complaint filed Friday, Oct. 4 and in an earlier proxy statement that the company has been prevented by the joint venture partner and union access to certain operational and financial information. We continue to work toward resolving the issues in China through communication with the workers, union and the joint venture partner. Cooper looks forward to closing this compelling transaction with Apollo, which will provide multiple benefits for both organizations, their employees, customers and communities.
I believe we are seeing the unraveling of the merger before our eyes here…