After a debate over the takeover led to a US law suit, it looks like Cooper Tire & Rubber Co. isn’t yet entitled to an order that would force Apollo Tyres Ltd. to pay a contractually agreed $35 a share for the company, as the judge pointed out in a weekend letter to lawyers.
Cooper must prove it had satisfied all the conditions of the $2.5 billion buyout agreement and whether it did so remains unresolved in litigation, Delaware Chancery Court Judge Sam Glasscock III wrote in a Nov. 9 clarification letter to lawyers.
“Cooper has failed to demonstrate a present entitlement to specific performance,” the judge wrote, referring to the $35-a-share payment.
After a three-day trial and closing arguments, Glasscock issued a preliminary ruling from the bench on Nov. 8, rejecting Cooper’s contention that Apollo delayed negotiations with Cooper’s United Steelworkers’ union and breached the agreement by acting in bad faith.
Cooper, based in Findlay, Ohio, sued Gurgaon, India-based Apollo after Apollo failed to complete the buyout by an Oct. 4 deadline and suggested the stock might we worth as much as $9 a share less. Cooper shares fell more than 11 % to $23.82 in Nov. 8 trading.
Another point of contention, Glasscock wrote, is whether Cooper can comply with a request that it provide third-quarter company financial results by Nov. 14, to satisfy Apollo’s lenders. The judge has said he’d try to release a fuller ruling on issues in the lawsuit within a few days.
Cooper’s options include agreeing to a lower price that would accommodate Apollo. Options for Apollo include paying a $112.5 million ‘‘reverse breakup fee” to walk away, according to Cooper’s complaint.