Cooper appeals court decision
Cooper Tire & Rubber Company is appealing the partial ruling made by the Delaware Chancery Court last week. The appeal was filed with the Delaware Supreme Court on 12 November and asks the court to rule on it on an expedited basis – before 31 December 2013, the date through which Cooper’s agreement with Apollo Tyres remains in effect. Cooper confirms that until that date, the 8 November partial ruling requires both parties to continue performing their obligations under the merger agreement.
After filing its appeal, Cooper Tire issued the following statement: “Cooper believes that, with all due respect to the Vice Chancellor and the Court, the November 8 ruling misconstrues the contract between Cooper and Apollo. We are seeking a reversal of the ruling from the Delaware Supreme Court.
“While we dispute the November 8 decision and points expressed in the Vice Chancellor’s November 9 clarification letter, we are pleased it was confirmed that Apollo remains required to use its best efforts to reach an agreement with the United Steelworkers (USW). Cooper will continue to work toward closing the transaction that both parties agreed to on June 12, 2013.
“Cooper entered into the agreement with Apollo from a position of strength. Our company generated record sales and earnings in 2012 and continued to perform well with record earnings in Q1 and operating profit that was up in the first six months of 2013 compared to the prior year. Our joint-venture in China was performing well with no labour or other unrest. We were not looking to be acquired, but our operating performance and growth-oriented strategic plan for the future attracted Apollo to Cooper.
“There is one point on which all parties agree – it was the merger agreement itself that caused the issue with our CCT (Cooper Chengshan Tire) joint venture in China. Absent the agreement, CCT would have continued in full operation, performing well and making an important contribution to Cooper’s results. Cooper’s highly respected brands, award-winning products, reputation for quality and customer service, and strong global footprint in the largest tyre market of North America as well as the fastest growing market of China, makes our future one of opportunity.
“Overall, Cooper believes it has met its conditions for closing and we believe that the best way forward starts with Apollo advancing the agreement with the USW that is currently on the table.”
Following the ruling from Delaware Chancery Court Vice Chancellor Sam Glasscock III on 8 November, the Cooper Tire share price decreased 12.2 per cent from US$26.63 to $23.42. At the close of trading on 12 November the price had lifted slightly to $24.05 – 51 cents a share lower than its worth on 11 June 2013, the day prior to the Apollo deal’s announcement.