One snippet of information to emerge from this week’s Cooper Tire & Rubber Co. v. Apollo Holdings Pvt Ltd court case is that Apollo attempted to eliminate opposition to its Cooper Tire buyout by acquiring the 35 per cent share in Cooper Chengshan held by Cooper’s joint venture partner. This potential problem-solver failed when the sum Apollo offered fell way short of the Chengshan Group’s expectations.
Apollo Tyres’ planned takeover of Cooper Tire appears to be in serious jeopardy as the latest court proceedings reveal the depth mistrust between the two companies. Cooper’s suggestion that Apollo has “buyer’s remorse” and is using the industrial dispute at Cooper Chengshan as a way of sabotaging the deal is the clearest example of this yet. The question of whether or not Apollo is putting everything it can into closing the deal is at the centre of the case. Apollo says it is doing everything it can despite the Chengshan and USW issues. Cooper says these are being used as delay tactics.
Yesterday the court case between Apollo Tyres & Cooper Tire & Rubber began in the US. The case is scheduled to run until tomorrow, and on the first day Cooper chairman, chief executive officer and president Roy Armes shared why relations with the partner in its Cooper Chengshan joint venture operation turned sour once the Apollo acquisition deal became known.
A merger-facilitating deal has been struck between Cooper Tire & Rubber and the United Steelworkers Union. On 30 October, the tyre maker entered into a tentative agreement with the United Steelworkers and United Steelworkers (USW) Local 207L (representing workers at the company’s Findlay plant) and Local 752L (Texarkana), along with USW Local 556L (Clarksdale). Details of the tentative agreement have not yet been disclosed –the agreement must first meet with Apollo’s approval and be ratified by union members.
In order to increase its ASEAN region presence, Taiwan’s Cheng Shin Rubber will invest NT$2.36 billion (£49.7 million) to build a plant in Indonesia. A filing to the Taiwan Stock Exchange states that the company’s board approved plans for the factory on 15 October.
A Delaware Chancery Court judge has turned down Apollo Tyres’ bid to have Cooper Tire & Rubber’s lawsuit against it dismissed. Judge Sam Glasscock III stated during a telephone hearing that both parties should “prepare for trial” if they can’t settle their differences alone.
Vredestein has announced the appointment of Giovanni Masinelli as global brand head Vredestein, joining the global marketing team based in Apollo Vredestein’s London office. He will start operating in his new role on 1 November 2013, reporting to Marco Paracciani, chief marketing officer, global.
Are investors experiencing a case of schadenfreude towards the latest Apollo/Cooper developments? The Apollo Tyres share price took a nose dive following the announcement of plans to acquire Cooper Tire & Rubber, falling from a 52-week high of Rs 101.5 on 8 May to a 52-week low of Rs 54.6 on 21 June. Now, buoyed by speculation that the deal may fall apart, the Apollo share price looks set to rise.
Sri Lanka is one of Apollo Tyres’ fastest growing export markets – the company says sales there have increased more than 50 per cent year-on-year since the brand’s introduction into Sri Lanka in June 2011. The Indian tyre maker has now opened its first branded retail outlet within the country.
Both Cooper Tire & Rubber and Apollo Tyres state they want the merger/acquisition deal to close, yet each blames the other for delaying this. First Cooper alleged its suitor wasn’t settling certain issues; now Apollo says Cooper has failed to address everything required for the agreement to be finalised.
Apollo Vredestein has been named one of The Netherland’s best employers. The Best Employer (Beste Werkgevers) 2013 awards were presented in Amsterdam on 8 October, and the tyre maker was ranked the third best employer in the 1,000+ employee category, behind airline KLM and non-profit organisation Stichting Buurtzorg.
Following a multi-agency pitch process, Apollo Tyres has appointed The Brooklyn Brothers its global creative agency. The agency’s London office will service the account and help build the Apollo brand via print, electronic and digital mediums.
On October 7th, Cooper Tire & Rubber Company issued a statement regarding the pending merger with Apollo Tyres, in which Cooper makes it plain that it believes that a reduction in share price is unwarranted. The statement, in full, reads as follows:
Cooper Tire & Rubber Company has filed a legal complaint against the company that has agreed to buy it in a friendly takeover, Apollo Tyres. Cooper filed a complaint on 4 October in Delaware Chancery Court asking that “subsidiaries of Apollo Tyres Ltd be required to expeditiously close the pending merger between the two tyre companies in accordance with the terms of the definitive merger agreement”.
Cooper Tire & Rubber has announced that its stockholders voted to approve its pending merger with a wholly-owned subsidiary of India’s Apollo Tyres, with more than 74 per cent of Cooper’s outstanding common shares voted in favor of the transaction. Approximately 78 per cent of Cooper’s outstanding common shares were voted, with more than 48 million shares voted in favor of the merger, representing approximately 96 per cent of Cooper’s voted shares.
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