Apollo Tyres rallies over 4% as $2.5 bn Cooper Tire deal falls apart

Apollo Tyres rallies over 4% as $2.5 bn Cooper Tire deal falls apart

NEW DELHI: APOLLO TYRES BSE 1.29% Ltd rallied as much as 4.5 per cent in morning trade on Tuesday, on reports that the its bid to buy

for $2.5 billion (Rs 14,400 crore) is at risk of falling apart with both companies squabbling openly and the Indian side making accusations of "misrepresentation"

At 10:00 a.m.; Apollo Tyre pared some of the morning gains and was trading 2.2 per cent higher at Rs 71.35. It has hit a low of Rs 70.30 and a high of Rs 73 in trade today on the Bombay Stock Exchange.

The differences between the two are largely over control of the Chinese unit and obligations to US workers - became public when Cooper Tire approached the Delaware Chancery Court asking that subsidiaries of Onkar Kanwar's Apollo Tyres "expeditiously close" the pending merger between the two, ET reported.

Apollo reacted furiously, calling Cooper's complaint "inexplicable" and a "diversionary smokescreen", in a statement issued on Monday. "We urge Cooper to stop this time-wasting and costly exercise and focus on solving the outstanding issues."

The development cheered investors, who were vehemently against the deal. The stock rose 5 per cent to 69.80 on Monday. The stock has rallied a little over 10 per cent since September, as of data collected on 7 October.

Apollo had crashed from a high of 101.50 on May 8 to 54.60 on June 21 after the acquisition was announced. It may be recalled that Tata Motors' purchase of was pegged at $2.3 billion in 2008.

Apollo made clear that there were differences with Cooper over what it regards as the ambiguity related to control of the Chinese subsidiary and obligations such as liabilities to workers belonging to the (USW) union, added the ET report

RAJ GAURAV

PGDM 1st YEAR