Created on Saturday, 05 October 2013 Written by THE ASSOCIATED PRESS
FINDLAY, Ohio (AP) — Cooper Tire & Rubber Co. filed a complaint in Delaware Chancery Court on Friday asking that Apollo Tyres Ltd. be required to quickly close on their pending deal.
Investors appeared to take the move as a sign the deal is in jeopardy. Cooper's stock fell $3.56, or 12 percent, to $25.95 in extended trading following the announcement. They fell almost 6 percent in Friday's regular trading session.
Apollo Tyres, based in India, announced in June it was buying Cooper for $35 a share, or about $2.2 billion. The deal was approved by boards of both companies and later by Cooper shareholders.
The deal, however, has been delayed by union talks.
Cooper is asking the court to compel Apollo to take actions so that the deal can close. The complaint says that Apollo is delaying reaching agreements with the United Steelworkers, which represents Cooper employees at facilities in Findlay, Ohio, and Texarkana, Ark.
An arbitrator ruled last month that Cooper and Apollo must enter into new agreements with the union prior to closing. By delaying resolution with the union, Cooper argues that Apollo is breaching its contractual agreement.
Cooper is based in Findlay but incorporated in Delaware.
Cooper CEO, President and Chairman Roy Armes said that the company has an obligation to protect the rights of its stockholders, who voted overwhelmingly in favor of the merger.
"Apollo is an outstanding company," Armes said in a statement, but he added that the complaint is a necessary step to assure the terms of the agreement are met.
A representative for Apollo could not be reached immediately for comment.
The deal would create the seventh-largest tire company in the world.