By TOM MURPHY
2013-12-31 03:01 AM
Cooper Tire & Rubber Co. is calling off its sale to India's Apollo Tyres, unraveling a $2.2 billion deal announced just over six months ago.
Cooper said financing is no longer available and it continues to claim, as it has for months, that Apollo breached the terms of the agreement.
Apollo said after the announcement Monday, which it called disappointing, that it may pursue legal remedies.
Both companies agreed to the sale in June, but things deteriorated rapidly. Negotiations with the union representing Cooper employees became a sticking point.
Apollo sought a better price citing labor issues in China and weaker profit, which Cooper said was a stalling tactic. The Findlay, Ohio, company took its claim to a Delaware court, but a ruling last month found no breach of obligations on Apollo's part.
Cooper Chairman and CEO Roy Armes said during a brief, Monday morning webcast that Cooper never received a new offer from Apollo that came with committed financing and that presented "unreasonable risk" for his company.
Company executives vowed to pursue a reverse termination fee of $112.5 million and other possible damages. They do not believe the company owes Apollo a $50 million termination fee that was part of the initial agreement.
Cooper will return to court with Apollo to resolve some remaining issues, including whether Apollo made an appropriate effort to reach a deal with the union, said Chief Financial Officer Brad Hughes.
Apollo Tyres Ltd. said Monday that it had made "exhaustive efforts to find a sensible way forward over the last several months."
Shares of Cooper fell 20 cents to $22.76 in late-morning trading.
Company shares soared to nearly $35 in June after it announced the buyout, but they have fallen steadily since then.