Cooper Tire & Rubber Co. said it reached a deal with the United Steelworkers union on the eve of a trial seeking to force a $2.5 billion takeover of the company by Apollo Tyres Ltd.
Cooper demanded that Apollo, which is obligated by the terms of its buyout agreement to help resolve union disputes, sign off on the pact with the union by today, according to papers filed this morning in Delaware Chancery Court. Apollo called the move a “last-minute stunt.”
“Apollo objects to this last-minute hijack of this expedited litigation,” Christopher Lyons, an attorney for the company, said in a pretrial filing made jointly by the two companies. Cooper is attempting to insert an entirely new set of issues into the case before the Nov. 5 trial, Lyons argued.
Cooper, based in Findlay, Ohio, said on June 12 it would be bought by Apollo. Cooper sued Apollo to enforce the buyout after the Gurgaon, India-based company failed to close the deal by an Oct. 4 deadline, citing labor union disputes in the U.S. and a strike at a Chinese partner’s tire operations.
Apollo has said it won’t complete the transaction unless Cooper agreed to a price reduction.
Cooper fell 11 cents to $25.90 at 4 p.m. in New York.
Cooper hasn’t disclosed details of its tentative agreements with unions at its plants in Findlay and Texarkana, Arkansas, pending review and consent by Apollo, the company said today in a filing with the U.S. Securities and Exchange Commission. The agreements expire on Nov. 18.
Apollo called the deal “illusory” in a letter today to Delaware Chancery Court Judge Sam Glasscock III. The company accused Cooper of taking “extraordinary” steps in order to induce the union into an agreement before the start of next week’s trial. The deal includes a provision that “contemplates improvements in the USW contracts even if this merger is not consummated,” Raymond DiCamillo, an attorney for Apollo, wrote in the letter.
Apollo is required to consent to the new agreement pursuant to its obligations under the merger accord, Cooper said in its own letter to Glasscock. Apollo should be compelled to consent to the new agreement reached with the United Steelworkers on Oct. 30 and then be required to consummate the merger, Cooper said.
“Apollo is currently using its best efforts to delay the transaction, is adding conditions to closing not found in the merger agreement, and is deliberately preventing the merger from closing,” John Sensing, an attorney for Cooper, said in the pretrial filing today.
The judge in Wilmington has set three days for the trial.
The case is Cooper Tire & Rubber Co. v. Apollo Holdings Pvt Ltd., CA8980, Delaware Chancery Court (Wilmington).