A couple of weeks ago, I wrote that two of the region’s largest employers, Cooper Tire and Lane Furniture Industries, were facing a big week. Cooper Tire shareholders were voting on its $2.5 billion merger with Apollo Tyres, while Furniture Brands International said its Lane Furniture division was up for grabs.
Now Cooper is in a war of words with Apollo, while FBI and Lane have been given a new lifeline.
For Lane and its 1,400 workers, a ray of hope emerged after the bankruptcy judge agreed to let KPS Capital Partners be the “stalking horse” bidder for Furniture Brands. In plain-speak, that means KPS has set the minimum bid for the company in an auction that will take place in December. And KPS’ bid is $280 million, $114 million higher than initial stalker Oaktree Capital.
Even more importantly, KPS said it plans to offer jobs to as many people as it can at Furniture Brands once its deal is approved.
Details still need to be hammered out, and somebody else could offer an even higher bid. But the news is a lot better now that it was a month ago, when Furniture Brands filed for Chapter 11.
Furniture Today’s Thomas Russell and Heath Combs wrote stories essentially pointing out that Furniture Brands lost its focus and dropped the ball through the years. But the stories did offer hope. Read them if you get a chance.
No matter who buys Furniture Brands’ assets, plenty of work needs to be done to get each division back on its feet.
Then there’s the implosion of the Cooper-Apollo merger. Each side is blaming the other for delays in moving the $2.5 billion deal forward.
In June, Apollo offered Cooper shareholders $35 a share to acquire the Ohio-based company. In the following days, Cooper shares rose just 21 cents under that amount; meanwhile, Apollo shares plunged.
But labor issues have plagued the deal. Cooper’s two unionized plants in Findlay, Ohio and Texarkana, Ark. can’t be sold until Apollo negotiates a bargaining agreement with the union, an arbitrator ruled last month. Meanwhile, Cooper’s joint-venture plant in China stubbornly refuses to make Cooper-branded tires or let Cooper executives in because they don’t like the merger.
Cooper said Apollo is dragging its feet talking to the union, while Apollo said Cooper isn’t doing its part to work things out with the Chinese workers.
Many analysts see the deal unraveling, with Apollo delaying action until the end of the year. By doing so, it will avoid a $112.5 million breakup fee. Cooper shares have dropped in light of the news, while Apollo shares have risen.
Should the merger fail, what’s next for Cooper? In pushing the merger from the start, Cooper said its growth would slow without a deal. Some experts expect Cooper shares to take a short-term hit should the deal fail – perhaps opening other merger opportunities. If not, Cooper may have to slog on alone.
So, in two weeks, Lane workers are feeling better. Cooper workers are still wondering what’s going to happen.
Contact Dennis Seid at (662) 678-1578 or firstname.lastname@example.org