Writing on Reuters Breakingviews, corporate finance columnist Una Galani draws attention to how financial institutions contributed towards the current tensions between Apollo Tyres and Cooper Tire & Rubber. She opines that Apollo’s move to renegotiate its Cooper acquisition deal and seek a buying price less than the US$2.5 billion originally offered was pushed by attempts from Apollo’s lenders to extricate themselves from the takeover agreement.
A filing Cooper Tire & Rubber submitted with the US Securities and Exchange Commission on 12 November does little to raise hopes that the company can provide Apollo Tyres’ creditors with financial information for the quarter to 30 September 2013 by tomorrow, as required in order for Cooper not to breach its merger agreement.
A merger-facilitating deal has been struck between Cooper Tire & Rubber and the United Steelworkers Union. On 30 October, the tyre maker entered into a tentative agreement with the United Steelworkers and United Steelworkers (USW) Local 207L (representing workers at the company’s Findlay plant) and Local 752L (Texarkana), along with USW Local 556L (Clarksdale). Details of the tentative agreement have not yet been disclosed –the agreement must first meet with Apollo’s approval and be ratified by union members.
Both Cooper Tire & Rubber and Apollo Tyres state they want the merger/acquisition deal to close, yet each blames the other for delaying this. First Cooper alleged its suitor wasn’t settling certain issues; now Apollo says Cooper has failed to address everything required for the agreement to be finalised.
On October 7th, Cooper Tire & Rubber Company issued a statement regarding the pending merger with Apollo Tyres, in which Cooper makes it plain that it believes that a reduction in share price is unwarranted. The statement, in full, reads as follows:
Sibur-Russian Tyres has announced the promotion of Dimitry Sokov to the role of chief executive officer. The chief operational officer’s appointment to the position takes effect 6 February. Sokov replaces Vadim Gurinov as chief executive officer; Gurinov now serves as chairman of the company’s Board of Directors.
The Trelleborg Group has named its replacement for Carolina Dybeck Happe, who during the first quarter of this year will step down from her position as chief financial officer in order to take up a similar role with another company. Ulf Berghult, who returns to Trelleborg from automotive, caravan and marine product manufacturer and supplier Dometic Group, will assume the position of CFO during the second quarter of 2012.
Continental’s Passenger and Light Truck Tire (PLT) division is gearing up for a round of management musical chairs: On July 1, head of worldwide Research & Development PLT, Christian Kötz, takes over as head of PLT Replacement EMEA, a slot temporarily filled by Nikolai Setzer, head of the Passenger and Light Truck Tire division. The position previously held by Kötz will be taken on by David O’Donnell; to take up this Germany-based role O’Donnell will leave the United States, where he is currently oversees Key Account Management The Americas for PLT’s OE business. And, as previously announced, Continental’s current head of Mergers and Acquisitions activities, Dr. Jochen Etzel, takes charge of the PLT business unit Replacement The Americas, also on July 1, 2011. He will be based in Fort Mill, South Carolina. Etzel succeeds Matthias Schönberg, who will be taking on a new assignment within the Rubber Group by taking over the helm of ContiTech Fluid GmbH.
New research by analysts at Plimsoll suggests the UK tyre market is polarised between “those getting it right and those struggling to recover.” David Pattison, senior analyst and author of the 2011 Plimsoll Analysis explained: “Now that the storm is lifting we have been able to assess the damage left behind. 38 companies are in parlous state and starting the New Year clinging on for dear life. We have rated them as Danger accordingly. Falling demand was the final nail in the coffin for many. The mistake they made though was to not make those painful cuts early enough to protect their business”.
Several changes in Goodyear Tire & Rubber’s finance leadership have been announced. Filling the soon to be vacant position of vice president and controller, North American Tire is Richard J. Noechel, currently vice president of finance for North American Tire. Noechel replaces Thomas A. Connell, who intends to retire on March 1, 2011. The position at present occupied by Noechel will be filled by Laura K. Thompson, who currently serves as vice president of business development. Stepping a rung up the ladder into Thompson’s old job is David Campopiano, currently senior director of business development. All abovementioned changes will take effect on March 1, 2011.
Michelin’s unexpected decision to announce a 1.2 billion euro rights issue at the Paris Motor Show on Tuesday 28 September may have knocked confidence in the company’s free cash flow generation amongst those observers that are concerned the company is being too cautious. But question marks also remain over what the company’s strategy is here. In the trading session following the announcement, Michelin shares dropped by more than 8.0 per cent according to the AFP News agency.
Continental may buy Schaeffler Group’s automotive assets (namely LuK clutches and/or INA bearings) and then float its Rubber Group to pay for it. That’s the view of Klaus Pflum, head of investment bank Nomura's European automotive mergers and acquisitions operations, who made this prediction at the Reuters Auto Summit in Paris. In his view Continental is more likely to opt for an initial public offering (IPO) and this route may raise more money than a divestment and direct sale: "I don't see any banks who are willing to finance a four to five billion euro debt ticket,” Pflum told the conference.
Porsche has increased its stake in Volkswagen ordinary shares to 50.8 per cent. Analysts Morgan Stanley say that, while the timing of such a move was impossible to predict, this is absolutely in line with Porsche’s stated strategy of ultimately moving to 75 per cent of Volkswagen and seeking a domination agreement.
With this move, Porsche also acquires indirect control over Scania through VW’s 68.6 per cent voting stake in the Swedish truck maker. Porsche has made it clear that is has no strategic interest whatsoever in Scania or any interest in buying Scania shares. However, Swedish law requires Porsche to make a mandatory bid for Scania.
Replacement demand is currently the most important driver in the European mechanical testing and material handling equipment market. Products from established manufacturers are increasingly being replaced by novel offerings from new participants, driving competition and volume sales, according to Frost & Sullivan.
The research firm said the European mechanical testing and material handling equipment market earned revenues of 566.8 million euros in 2005 and estimates this will reach 725.73 million in 2012. “As customers attempt to constantly update and equip themselves with the latest technologies, they are no longer willing to limit themselves to traditional manufacturers,” said F&S senior research analyst Benny Daniel. “End consumers are signing contracts with manufacturers with these competencies, generating fresh demand for garage equipment as a result.”
Scania has rejected MAN’s takeover offer. The news follows speculation and then confirmation that German truck and bus maker MAN launched an unsolicited bid worth 9.6 billion (£6.5 billion) for its Swedish rival Scania. Volkswagen and Investor, a Wallenberg family firm, each own major blocks of Scania shares and the Financial Times suggested Investor may reject the offer. The FT also hinted at possible counter bids from other firms, including Paccar. Swedish truck maker Scania says its board met on Sunday 17 September and “unanimously decided not to support the proposals” from MAN AG.