Created on Saturday, 09 November 2013 Written by THE ASSOCIATED PRESS
FINDLAY, Ohio (AP) — The Delaware Court of Chancery has rejected a claim by Cooper Tire & Rubber Co. that Apollo Tyres breached the terms of an agreement to buy Cooper Tire.
The decision handed down Friday is the latest snag in a monthslong dispute that has delayed Apollo's takeover of Findlay, Ohio-based Cooper.
On Oct. 4, Cooper asked the Delaware court to compel Apollo to close the deal, originally valued at $2.2 billion. Cooper asserted that Apollo was delaying reaching an agreement with the union representing Cooper employees. An arbitrator had ruled in September that Cooper and Apollo must enter into new agreements with the union prior to closing on their merger.
But in a partial ruling Friday, Vice Chancellor Sam Glasscock concluded that Apollo did not breach its obligation to quickly reach a pact with the United Steelworkers union.
In a statement, Cooper expressed disappointment in the court's decision, adding that it is assessing its options and waiting to see how the court rules on other matters in the case.
Apollo, which is based in India, praised the decision. "Apollo continues to believe in the merits of the combination and is committed to finding a sensible way forward," the company said in a statement.
Apollo has said it is working diligently to reach a settlement with the union, but contends that a reduction of the deal's price is warranted.
Cooper Tire's shares ended Friday down $3.08, or 11.5 percent, at $23.82, well below the deal's original buyout price of $35 a share. They recovered 83 cents, or about 3.5 percent, to $24.65 in extended trading.
Last month, Apollo filed a counterclaim against Cooper, asking for a judgment that Cooper hasn't provided documents and met other requirements for a merger.
The boards of both companies and Cooper shareholders have approved the proposed buyout, first announced in June. But it has been delayed by talks with the United Steelworkers union, which represents Cooper workers in Findlay, Ohio, and Texarkana, Ark.
The deal would create the seventh-largest tire company in the world.