Both parties put out statements blaming the other for the deal falling through and have promised to pursue legal action in a bid to extract a breakup fee that both claim they are owed.
The agreement had specified a liability for both Apollo (USD 112 million) and Cooper (USD 50 million) should either party choose to walk out.
Also read: Apollo Tyres up 12% after Cooper annuls $2.5 bn merger deal
But with both parties blaming each other, we trace our story archives to put together a timeline of an acrimonious corporate battle that brewed right since the deal was announced:
- June 12: Apollo and Cooper announce a merger agreement, consummation of which would create the seventh largest tyre company in the world, and the biggest M&A deal by an Indian company, surpassing Tata's buyout of JLR.
- Within days, Apollo stock falls from a high of Rs 90 to a low of Rs 55 amid concerns over both the leverage it was willing to take on to close the deal and the supposedly rich valuations it had offered for Cooper.
- July 13: 5000 workers in Cooper Chengshan, the US company's joint venture go on strike to protest the deal, citing Apollo's potential debt burden and culture clashes with an Indian management.
- August 1: The United SteelWorkers (USW), a Texas labour union, files a grievance with an arbitrator saying it has right to decide on the terms of the deal with Apollo.
- September 15: Arbitrator upholds USW's grievance, bars Cooper from going ahead until Apollo reached a satisfactory deal with the union over job security.
- September 17: Cooper provides a new forecast for 2013, saying it expects operating profits to fall about 33 percent, blaming the China strike for lower-than-expected revenue and profits. This is the fourth such projection revision Cooper has made since the deal was announced.
- October 8: Apollo seeks a price cut of about "USD 8 or USD 9" per share from the USD 35 it was willing to pay as per the original agreement, citing delays over the union troubles. Cooper says Apollo is suffering from "buyers' remorse" and drags the company to a Delaware court accusing Apollo of breaching its agreement.
- November 9: Delaware court rules in favour of Apollo and says the company did not breach its contractual agreement. Cooper appeals in a higher court.
- December 16: Delaware Supreme Court dismisses Cooper plea asking for the agreement to be enforced.
- December 30: Cooper announces deal is called off as Apollo "could not arrange for financing" required for the deal. Seeks to claim breakup fee and damages. Apollo says Cooper responsible for deal failure and also seeks breakup fee.
Apollo Tyres stock price
On December 31, 2013, Apollo Tyres closed at Rs 107.15, up Rs 5.85, or 5.77 percent. The 52-week high of the share was Rs 113.00 and the 52-week low was Rs 54.60.
The company's trailing 12-month (TTM) EPS was at Rs 7.24 per share as per the quarter ended September 2013. The stock's price-to-earnings (P/E) ratio was 14.8. The latest book value of the company is Rs 46.24 per share. At current value, the price-to-book value of the company is 2.32.
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