[CORRECTED] Round one of the most recent court battle between Apollo Tyres Ltd. and Cooper Tire and Rubber Co. goes to... Apollo.
On Friday, Nov. 8, 2013, Judge Sam Glasscock III, vice chancellor of the Delaware Court of Chancery, ruled that Apollo was not in breach of its merger agreement with Cooper, which had filed a complaint to the contrary.
In addition, the court found that Apollo had used "reasonable best efforts" to negotiate with the United Steelworkers (USW), and that "nothing in Apollo’s conduct indicates buyer’s remorse."
As you might expect, Apollo is pleased with the ruling.
"Apollo continues to believe in the merits of the combination and is committed to finding a sensible way forward,” said the company in a statement.
Cooper Tire, on the other hand, says it is disappointed with the decision. It is assessing its options with respect to this decision, and awaiting the court’s ruling on other open matters in this case.
On Oct. 9, 2013, the Delaware Chancery Court had ruled in favor of Cooper, determining that the company's request for an expedited hearing of its Oct. 4 complaint against Apollo was not frivolous.
In June, Apollo Tyres Ltd and Cooper Tire & Rubber Co. announced a merger agreement under which a wholly owned subsidiary of Apollo would acquire Cooper in an all-cash transaction valued at approximately $2.5 billion.
However, last month, Cooper filed a complaint in Delaware Chancery Court asking that subsidiaries of Apollo "be required to expeditiously close the pending merger between the two tire companies in accordance with the terms of the definitive merger agreement."
Apollo countersued, saying it was Cooper that was in violation of the agreement.
Corrected 11/12/2013: An earlier version of the headline incorrectly referred to a different tire compay. We apologize for the error.