Cooper Tire (CTB) Trial Reveals Deal-Within-Deal to Delaware Judge
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(Updated - November 7, 2013 2:15 PM EST)
Cooper Tire & Rubber (NYSE: CTB) is active Thursday afternoon following news that there might have been a deal-within-a-deal at work amid Apollo Tyre's $2.2 billion bid for the company.
The WSJ said that Apollo offered to buy out Cooper's joint venture partner Chengshan Group Co. for $200 million last September. The partner rejected the deal, demanding $400 million instead. Chengshan and Cooper were in an eight-year-old joint venture called CCT.
Testimony came from Apollo CFO Sunam Sarkar today during trial in Delaware.
Chengshan was also said to be interested in purchasing Cooper, but lost out to Apollo. Instead, Chengshan took control of a factory and has refused to produce product. The factory accounted for about one-quarter of Cooper's $4.2 billion in revs last year.
Apollo doesn't need to terminate the deal if Chengshan won't sell, but the factory is key and Apollo won't be able to sell bonds to replace a $1.875 billion bank facility otherwise.
Apollo is looking to offer about $35 per Cooper share to Chengshan in light of the issue.
Cooper is up 7.8 percent.
Cooper Tire & Rubber (NYSE: CTB) is active Thursday afternoon following news that there might have been a deal-within-a-deal at work amid Apollo Tyre's $2.2 billion bid for the company.
The WSJ said that Apollo offered to buy out Cooper's joint venture partner Chengshan Group Co. for $200 million last September. The partner rejected the deal, demanding $400 million instead. Chengshan and Cooper were in an eight-year-old joint venture called CCT.
Testimony came from Apollo CFO Sunam Sarkar today during trial in Delaware.
Chengshan was also said to be interested in purchasing Cooper, but lost out to Apollo. Instead, Chengshan took control of a factory and has refused to produce product. The factory accounted for about one-quarter of Cooper's $4.2 billion in revs last year.
Apollo doesn't need to terminate the deal if Chengshan won't sell, but the factory is key and Apollo won't be able to sell bonds to replace a $1.875 billion bank facility otherwise.
Apollo is looking to offer about $35 per Cooper share to Chengshan in light of the issue.
Cooper is up 7.8 percent.
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