Apollo's Cooper plan stalled by concerned shareholders
India’s Economic Times reports that Apollo Tyres has “put on hold its plans of going ahead with the acquisition” of Cooper Tire & Rubber Co. Tire Review writes that the newspaper, which first reported about the possible acquisition deal back in October, reported yesterday that “sources with direct knowledge” said the plan was put on ice because Apollo “did not get a favorable response to its qualified institutional placement (QIP) from the institutional investors who were worried about the end-use of the funds.”
One anonymous institutional investor, the Economic Times reported, said, “There is no reason for Apollo Tyres to take huge debt and make such a big acquisition.”
The QIP, which was announced well prior to the initial reports that Apollo was considering a run at Cooper, was to raise some $150 million for expansion of Apollo’s business. That “expansion” was not defined at the time.
Those funds, the Economic Times reported, were to go against the estimated $600 million to $800 million needed to acquire a majority stake in the Findlay, Ohio, tyre-maker.
As it stands right now, reports said, the QIP may still progress and that Apollo has a 12-month “window in which to raise the funds.”
“In response to the plans to acquire Cooper Tire,” the newspaper reported, “Apollo Tyres said, ‘As for the second part of your query, please note that while we are constantly evaluating all our growth options, both organic and inorganic, there is nothing at this stage which is likely to be concluded in the next few months.’”
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