Was a rival Cooper bid the elephant in Apollo’s room?

As late as 15 November, Cooper Tire & Rubber wrote in a statement that it “continues to seek the expeditious closing of the merger with Apollo Tyres.” Yet Sunam Sarkar, chief financial officer at Apollo Tyres, opines that Cooper’s fidelity as a partner was in question from the very start – a point that only came to light later on.

In an interview with Forbes India, Sarkar said that its negotiations to acquire Cooper Tire didn’t fail for lack of due diligence, rather because of “the intransigence of one partner in China”. Going into further detail, he stated that in addition to dealing with Apollo, Cooper had also toyed with the possibility of being acquired by its Chinese joint venture company, Chengshan Cooper Tire. “On the 12th of June they (Cooper) signed with us. On the 15th of June, this guy (Chengshan Cooper Tire chairman Che Hongzhi) was in the US at their invitation to see if he would bid higher. He did bid higher. He bid US$38 per share but Cooper believed his financing was not as committed as Apollo’s and chose to go ahead with Apollo. That’s really the underlining factor behind this whole thing.”

Sarkar claims Apollo saw no reason to question Cooper’s management when they said there were no issues with its Chinese joint venture: “We took them at face value when they said that in the Chinese joint venture things are going well with them and there is no problem and so on.”