DOVER, Del. (Dec. 17, 2013) — The Delaware Supreme Court has reversed itself and rejected its own granting of an appeal by Cooper Tire & Rubber Co. of an earlier ruling by the Delaware Chancery Court seeking an “expedited” completion of the $2.5 billion acquisition/merger deal by India's Apollo Tyres Ltd.
The court had been scheduled to hear arguments on the matter on Dec. 19, but instead now contends its granting of Cooper's appeal on Nov. 15 was “improvidently accepted,” which—according to legal definition—means the court recognized it made a mistake in granting the appeal in the first place.
The ruling means the case reverts to the Delaware Chancery Court, where, as yet there are no hearings scheduled.
In prepared statements, Apollo Tyres and Cooper expressed markedly different reactions to the court's ruling.
Apollo said it is “pleased” with the decision, “which did more than dismiss Cooper's appeal,…” while Cooper called the court's action a “procedural ruling” that was not based on the merits of the issue on appeal.
In its statement, Apollo called out Cooper for its “litigation strategy,” which has has done “nothing but generate unnecessary cost for its shareholders and for Apollo, and compound the obstacles that Cooper's situation has created for this merger.”
Apollo also reiterated its stance that it “continues to believe in the merits” of merging with Cooper and is “committed to finding a sensible way forward, if possible.”
For its part, Cooper maintains its belief that “Apollo has breached the merger agreement,” and said it will continue to “pursue our legal options as we work to protect the interests of our company and our stockholders.”
Cooper filed suit against Apollo in the Delaware Chancery Court on Oct. 4 seeking to compel Apollo to “expeditiously close the pending” $2.5 billion merger of the two companies.
Apollo and Cooper first made their buyout/merger plan public on June 12, declaring the merged entity would become the world's seventh largest tire maker with annual sales of about $6.6 billion.
Cooper is facing a Dec. 31 deadline, which according to terms of the companies' merger agreement signed in May, is the date by which Apollo can terminate the agreement if the parties have not concluded the terms of the agreement satisfactorily.