Cooper Tire & Rubber Co sought the Delaware Supreme Court to issue its ruling on the delayed USD35 per share takeover offer from Apollo Tyres Ltd by December 31. Last November 8, a judge ruled that the contractual conditions had not been met and Cooper was not entitled to enforce upon Apollo the obligation to complete the said buyout.
Cooper today had filed an appeal to the Delaware Supreme Court seeking an expedited hearing. In its filing, the lawyers for Cooper said that Apollo may most likely to terminate the merger, should the findings be that Apollo had not materially breached the parties agreement.
The company's lawyers further added that unless the ruling of Judge Sam Glasscock III of the Delaware Chancery Court is reversed, "it threatens not just this $2.5 billion merger, and the expectation interests of Cooper's shareholders, but the broader corporate community's settled expectations regarding the requirement to use 'reasonable best efforts' to consummate a merger."
The negotiations to complete the largest acquisition of a North American firm by an Indian company went downhill because of opposition from both US and Chinese workers. Apollo had sought to decrease the price, claiming labor issues would affect the overall stability of the investment. Cooper then sued Apollo last October 4 alleging the latter was suffering from buyer's remorse and was intentionally dragging its feet on the completion of the transaction.
In his ruling, Judge Glasscock said that Apollo was not delaying the acquisition as it was negotiating with US steel workers. This meant that the Indian company had not violated the merger contrary to the allegations made in the suit. What the judge did not touch on was if the problems of the China unit of the firm would allow the Indian company to walk away. The absence of financial information was one of the reasons for the impasse over the sale of the company.
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