Court delays Cooper Chengshan anti-merger case
In the latest installment in the on-going Apollo/Cooper merger saga, a Chinese court has postponed a hearing on a case brought against the combination by Chinese manufacturing business Cooper Chengshan.
According to a Bloomberg report, the Weihai Intermediate People’s Court pushed back the 24 September hearing to an undetermined date, said a court official, who asked not to be identified, citing court rules. In the 29 July lawsuit, China’s Chengshan Group sought the dissolution of its venture with Cooper, saying the US partner’s proposed $2.5 billion buyout by India’s Apollo Tyres Ltd. would undermine the Chinese venture’s operations. Cooper has reportedly said the litigation lacks merit.
Bloomberg quoted Basudeb Banerjee, an analyst at Quant Broking Ltd. in Mumbai as saying: “The lawsuit may lead to some further delay in the closing of the deal as it may change the value of the transaction…If the JV is dissolved, then it may reduce the price for Apollo.”
It is debatable how much this is delaying the deal with representatives of both Cooper and Apollo saying the merger is still very much on track. However, some suppliers are calling to press for payments and some orders being are cancelled, according to a 18 June letter posted on Chengshan Group’s website.