Apollo Tyres rose 3.01% to Rs 68.50 at 10:29 IST on BSE on growing uncertainty about the status of the company's $2.5 billion deal to buy US-based Cooper Tire & Rubber Company.
Meanwhile, the BSE Sensex was down 217.53 points, or 1.09%, to 19,698.42.
On BSE, 1.29 lakh shares were traded in the counter compared with average volume of 6.70 lakh shares in the past one quarter.
The stock hit a high of Rs 69.25 and a low of Rs 66.85 so far during the day. The stock hit a 52-week low of Rs 54.60 on 21 June 2013. The stock hit a 52-week high of Rs 101.50 on 8 May 2013.
The stock had underperformed the market over the past one month till 4 October 2013, rising 2.39% compared with the Sensex's 7.26% rise. The scrip had, however, outperformed the market in past one quarter, rising 9.11% as against Sensex's 2.60% rise.
The mid-cap company has an equity capital of Rs 50.40 crore. Face value per share is Re 1.
Cooper Tire & Rubber Company (Cooper) on Friday, 4 October 2013, said that it filed a complaint in a US court asking that subsidiaries of Apollo Tyres be required to expeditiously close the pending merger between the two tyre companies in accordance with the terms of the definitive merger agreement.
Media reports suggested that Apollo Tyres is disappointed by the legal action and is working to complete the deal as expeditiously as possible.
Cooper is asking the court to compel Apollo to take actions so that the transaction may close. Among other matters, the complaint says that Apollo is seeking to delay an agreement with the United Steelworkers (USW). The USW represents Cooper employees at facilities in Findlay, Ohio and Texarkana, Arkansas. An arbitrator ruled on 13 September 2013 that, as result of the pending merger, Cooper and Apollo must enter into new agreements with the union prior to closing. By delaying resolution with the USW, Apollo is breaching the merger agreement, Cooper said in a statement.
On 30 September 2013, Cooper's stockholders voted to approve its pending merger with a wholly-owned subsidiary of Apollo Tyres with more than 74% of Cooper's outstanding common shares voted in favor of the transaction. When finalised, the pending merger will result in a strategic business combination that creates the seventh-largest tire company in the world.
Cooper and Apollo announced the proposed merger on 12 June 2013 following unanimous approval by the boards of directors of both companies. The pending merger is expected to close by the end of this year, Cooper said in a statement.
Shares of Apollo Tyres are in downtrend ever since the company announced the deal on 12 June 2013, amid concerns that the large acquisition of US-based Cooper might impact the Indian company's balance sheet. The Apollo Tyres stock has slumped 25.54% from Rs 92 on 12 June 2013.
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. This 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, Apollo Tyres said in a statement.
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. The combined company will be the seventh-largest tyre company in the world and will have a strong presence in high-growth end-markets across four continents, Apollo Tyres said. With a combined $6.6 billion in total sales in 2012, the combined company will have a comprehensive portfolio of signature brands and greater ability to cross-sell products in diverse countries with negligible overlap, Apollo Tyres said.
Apollo Tyres' consolidated net profit rose 19.5% to Rs 165.95 crore on 0.83% growth in total income to Rs 3200.94 crore in Q1 June 2013 over Q1 June 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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