The $2.5 billion merger between Cooper Tire and Apollo Tyres is all but finished, and the latest move by Findlay, Ohio-based Cooper suggests the company is looking to recoup expenses related to the deal.
Cooper Tire, which employs 1,300 at its Tupelo plant, has moved to file damages against Apollo in Delaware Chancery Court.
According to Cooper, it “intends to pursue this case as an action for damages” and plans to approach the court after Jan. 1 in regard to scheduling of hearings.
That would mean the hearings would take place after Dec. 31 – Tuesday – the deadline for the merger to be complete.
While Cooper didn’t say it is giving up on the merger, it’s unlikely the two will come to terms. Since the June 12 merger announcement, the deal has crumbled, with labor issues hitting Cooper and Apollo asking for less than the $35-per-share price it originally offered to pay for Cooper.
Cooper accuses Apollo of delaying the merger despite knowing the risks involved. Apollo accuses Cooper of losing control of its joint-venture plant in China and not providing financial information it needs to secure financing for the deal.
Cooper asked Chancery Court Judge Sam Glasscock in a Dec. 20 letter that “all motions should be taken off calendar until a status conference can be held in January where the parties and the court can discuss next steps and an appropriate schedule.”
If the merger isn’t complete by Tuesday, Apollo can walk away without paying a $112.5 million breakup fee. The merger would have created the world’s seventh-largest tire manufacturer. Apollo had $2.5 billion in sales last year, while Cooper had $4.2 billion in sales.
Apollo shares have risen nearly 10 percent recently with the prospect that the deal will not go through.