Cooper Tire & Rubber Co. (CTB) dropped its bid to recover $112 million in fees from Apollo Tyres Ltd. over a buyout of the U.S. company that was sunk by opposition from Cooper’s Chinese tire-manufacturing partner.
Officials of Findlay, Ohio-based Cooper agreed Dec. 16 to drop a lawsuit, filed in state court in Delaware, that sought to extract a $112 million breakup fee from Gurgaon India-based Apollo over the collapse of the $2.5 billion deal, according to court filings. Apollo also agreed to drop its counterclaims.
“Each party shall bear its own costs and fees,” according to the dismissal notice, approved by Delaware Chancery Court Judge Sam Glasscock III Dec. 17.
The dismissal ends more than two years of contentious litigation over Apollo’s $35-per-share offer for Cooper, in what was billed as the biggest takeover of an auto-parts maker since 2007, according to data compiled by Bloomberg.
Neither Anne Roman, a Cooper Tire spokeswoman, nor Meghan Gavigan, a spokeswoman for Apollo with Sard Verbinnen, immediately returned calls today for comment on the dismissals of the lawsuits.
Glasscock concluded in October that Cooper couldn’t satisfy the terms of sale agreement with Apollo because it couldn’t provide financial data from its Chinese operations necessary to close the deal.
Chinese Opposition
After the sale to the Indian tiremaker was announced in June 2013, officials of Cooper’s Chinese affiliate, Chengshan Cooper Tires, seized control of the facility and refused to produce tires, release records or allow U.S. officials to tour the plant, according to court filings.
The seizure of the Chinese operations was a “major obstacle” to consummating the deal, Glasscock found. Since Cooper couldn’t close the deal, it wasn’t entitled to the $112 million breakup fee, the judge said.
Cooper officials said December 2013 they were dropping plans to sell to Apollo after financing for the transaction fell through. Apollo originally offered to buy the U.S. tiremaker for $35 a share. It cut its offer after learning of problems within Cooper’s Chinese partner.
Cooper’s lawyers argued in court Apollo officials knew when the deal was negotiated the tiremaker’s Chinese partner opposed it. Apollo’s claims that “labor disruptions” scuttled the deal were a pretext and the Indian company suffered from buyer’s remorse.
The case is Cooper Tire & Rubber Co. v. Apollo (Mauritius) Holdings Pvt, CA8980, DelawareChancery Court (Wilmington).
– Bloomberg
