Apollo Tyres - As confounding as it gets - Ambit

Since Apollo Tyres announced the acquisition/merger of Cooper Tire in June 2013, the acquisition has faced several hurdles. Cooper's Chinese JV's workers/partner as well as its US workers have been protesting the deal. However, on Friday, Cooper itself took Apollo to court to force Apollo to expeditiously close the deal. In response, Apollo claimed material representations by Cooper related to the United Steelworkers (USW) issue and the control enjoyed by Cooper over its Chinese JV's operations. Questions marks also surround the reduction in the share price offer (Apollo indicated that Cooper has agreed that some share price reduction is warranted whereas Cooper denied this). These developments highlight the increasing discord between the two parties.

We continue to have a negative view on the acquisition (which is further accentuated by questions surrounding above issues). If the deal falls through, then this could be perceived positively for Apollo and may have a positive effect on Apollo's share price.

Source : Equity Bulls

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