Cooper Tire & Rubber Co. (CTB)’s argument to force a $2.5 billion takeover by Apollo Tyres Ltd. (APTY) centers on the reluctant suitor’s insistence that the price be reduced, Cooper said in Delaware Supreme Court papers.
The company’s lawyers will argue at a Dec. 19 hearing that Apollo violated the merger contract by insisting that any agreement with the United Steelworkers union include reduction of the previously agreed-upon $35 a share, court papers show. Cooper shares today were trading below $24.
“Apollo’s attempt to use its negotiations with the USW to extract a price reduction from Cooper constituted a material breach of the merger agreement,” Cooper said in a filing late yesterday.
After a Delaware Chancery Court trial in November, Judge Sam Glasscock III ruled that Apollo didn’t breach its contractual obligation to use its best efforts to resolve disputes with the union and he couldn’t order Apollo to complete the buyout.
Cooper appealed to the state’s high court, contending that Glasscock erred and that Apollo’s “selfish desire” and insistence on a price break constitute a violation.
Apollo should complete the deal at $35 or pay a $112.5 million “reverse breakup fee” to walk away, Cooper said.
Apollo’s briefs for the hearing were filed under seal and aren’t available to the public.
The cases are Cooper Tire & Rubber Co. v. Apollo (Mauritius) Holdings Pvt, CA8980, DelawareChancery Court (Wilmington) and 624-2013, Supreme Court of Delaware (Dover).