Apollo Tyres headed for the highest price in more than six months in Mumbai trading after a Delaware court rejected an appeal by Cooper Tire & Rubber to force a $2.5 billion takeover by India’s biggest tiremaker.
Shares of Apollo rose 7.1 percent to 90.80 rupees, poised for the highest level since June 12, as of 10:07 a.m. in Mumbai. They plunged to as low as 56.35 rupees on June 25, after Apollo said June 12 it would buy Cooper for $35 a share.
Talks to complete the largest acquisition by an Indian company in North America soured in October amid opposition from U.S. and Chinese workers. Apollo, based in Gurgaon, India, sought to cut its $35-a-share offer by as much as $9, citing the labor issues. On Oct. 4, the day Apollo’s purchase was originally scheduled to close, Findlay, Ohio-based Cooper sued, alleging Apollo was intentionally delaying completion.
The state supreme court in Dover issued a one-page order yesterday, signed by Justice Randy J. Holland, dismissing the appeal of a ruling by the Delaware Chancery Court. Chancery Judge Sam Glasscock ruled last month that Apollo fulfilled its obligations to resolve related disputes with a U.S. labor union.
As an alternative to a settlement or paying what it originally agreed, Apollo could hand over a $112.5 million “reverse breakup fee” to walk away, according to Cooper’s complaint. Still, both parties will return to Chancery Court to resolve the remaining questions in the case.