Homegrown tyre major Apollo Tyres today said Delaware Supreme Court has ruled in its favour in its ongoing spat with US-based Cooper Tire over their proposed USD 2.5-billion merger agreement.
"We are pleased by the decision of the Delaware Supreme Court today, which did more than dismiss Cooper's appeal - the court decided the appeal was improvidently granted in the first place," Apollo Tyres said in a statement. Reuters.
On November 12, pushing for an early completion of their merger deal, Cooper Tire & Rubber Co had filed with the Delaware Supreme Court an appeal against the partial ruling on November 8, 2013 by Delaware Chancery Court.
Under the partial ruling of the lower court, Cooper and Apollo were required "to continue to perform their obligations under the merger agreement" till December 31, 2013, the date through which the agreement remains in effect.
Apollo further said: "Cooper's litigation strategy to date has done nothing but generate unnecessary cost for its shareholders and for Apollo, and compound the obstacles that Cooper's situation has created for this merger."
Stressing that the company continued to believe in the merits of the combination with Cooper, Apollo said: "Notwithstanding Cooper's stated aim to continue to pursue its misguided legal claims, (Apollo) is committed to finding a sensible way forward, if possible."
Reacting to the development, Apollo Tyres surged by 4.13 percent on the BSE during the afternoon trade from the previous close of Rs 88.25 apiece.
In October, Cooper filed a complaint in Delaware Court of Chancery to push for completion of their merger and stated that the Indian firm was seeking to delay an agreement with USW, which represents Cooper employees at facilities in Findlay, Ohio, and Texarkana, Arkansas.
Apollo had denied this but sought price reduction in the USD 2.5-billion deal citing problems related to the US firm's operations in China and concessions to the workers union but was rejected by Cooper.
In June, Apollo had announced it will acquire Cooper Tire & Rubber Co in an all-cash transaction valued at around USD 2.5 billion (nearly Rs 14,500 crore) and the merged entity was billed to become the seventh largest tyre maker in the world.
Later in the day, Cooper Tire Communications & Public Affairs Vice President Anne Roman told PTI that the Delaware Supreme Court today decided not to hear the company's interlocutory appeal.
"Today's action was not a decision on the merits of the issue on appeal, but instead was a procedural ruling that returns the case to the Delaware Chancery Court," she added.
Both Cooper and Apollo will return to the Chancery Court for resolution of the remaining issues in the case, Roman said.
"Cooper believes Apollo has breached the merger agreement and we will continue to pursue our legal options as we work to protect the interests of our company and our stockholders," she added.
