Apollo Tyres jumped 7.49% to Rs 91.10 at 9:52 IST on BSE on reports Cooper Tire & Rubber Company lost its court bid on Monday, 16 December 2013, to force Apollo Tyres to complete their proposed $2.5 billion merger.
Meanwhile, the BSE Sensex was up 92.88 points, or 0.45%, to 20752.40.
On BSE, so far 16.23 lakh shares were traded in the counter, compared with an average volume of 7.06 lakh shares in the past one quarter.
The stock hit a high of Rs 92.20 and a low of Rs 88.30 so far during the day. The stock hit a 52-week high of Rs 101.50 on 8 May 2013. The stock hit a 52-week low of Rs 54.60 on 21 June 2013.
The stock had outperformed the market over the past one month till 16 December 2013, rising 17.38% compared with the Sensex's 1.28% rise. The scrip had also outperformed the market in past one quarter, gaining 29.09% as against Sensex's 4.65% rise.
The mid-cap company has an equity capital of Rs 50.40 crore. Face value per share is Re 1.
According to media reports, Cooper Tire & Rubber Company's legal battle to hold its would-be buyer, Apollo Tyres, to the terms of their $2.5 billion merger took a hit on Monday, 16 December 2013, when a Delaware court dismissed Cooper's appeal.
The Delaware Supreme Court had been slated to hear arguments on the matter Thursday, 19 December 2013, but said in a court filing that the appeal had been "improvidently accepted," indicating it should not have been taken on by the court in the first place, reports added.
On 12 June 2013, Apollo Tyres announced that it would acquire Cooper, a company listed on the New York Stock Exchange, in an all-cash transaction valued at approximately $2.5 billion.
Later, Cooper accused Apollo of intentionally delaying the transaction and had gone to the US court to expedite the transaction. As per the terms of the bid, the deal can be terminated without any financial penalty after 31 December 2013.
Cooper in its filing with the court, on 4 October 2013, had blamed Apollo for delay in settling issues with some of its labour from USW union in the US plants. The USW represents Cooper employees at facilities in Findlay, Ohio and Texarkana, Arkansas. It said Apollo is also looking at reducing the deal price owing to labour issues at the company's US and China plants.
In its answer, Apollo had denied the allegations made by Cooper regarding the course of its negotiations with the USW and confirmed that it has worked diligently to reach a settlement with the USW to enable Cooper to overcome the USW injunction prohibiting Cooper from consummating the merger. Apollo said that conditions precedent to closing had not been satisfied because the marketing period for the financing, central to Cooper's claims in its complaint, had never commenced and that Cooper has failed to meet its contractual obligations.
On 8 November 2013, a partial ruling by Judge Sam Glasscock, III, Vice Chancellor of the Delaware Court of Chancery found that Apollo was not in breach of its merger agreement with Cooper Tire & Rubber Company. Furthermore, the Court found that Apollo has used reasonable best efforts to negotiate with the United Steel Workers (USW) and that, contrary to Cooper's claims, nothing in Apollo's conduct indicates buyer's remorse.
Cooper is the 11th largest tyre company in the world by revenue and it supplies premium and mid-tier tyres worldwide through renowned brands such as Cooper, Mastercraft, Starfire, Chengshan, Roadmaster and Avon.
If the merger between Apollo and Cooper is achieved, the strategic combination will bring together two companies with highly complementary brands, geographic presence and technological expertise to create a global leader in tire manufacturing and distribution. The merger will result in a strategic business combination that creates the seventh-largest tire company in the world.
Apollo Tyres' consolidated net profit rose 44.2% to Rs 219.48 crore on 1.7% growth in net sales to Rs 3433.46 crore in Q2 September 2013 over Q2 September 2012.
Apollo Tyres manufactures tyres and tubes for cars, trucks, farm equipment and light commercial vehicles. The company also manufactures automobile flaps and retreading materials.
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