Courier: Apollo puts Cooper Tire bid on hold - Toledo News Now, Breaking News, Weather, Sports, Toledo

Courier: Apollo puts Cooper Tire bid on hold

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By Lou Wilin
Staff Writer

FINDLAY, OH (THE COURIER) - Looks like at least one purchase will not be made this holiday season: Apollo Tyres, of India, has put on hold plans to buy Cooper Tire & Rubber Co., StreetInsider.com reported Tuesday.

Investors were uncomfortable with the plan because debt-strapped Apollo would have to raise more debt to buy Cooper, according to a KeyBanc report cited by StreetInsider.

Cooper Tire declined comment. An attempt to reach Apollo officials for comment was unsuccessful Tuesday. Both companies have publicly dismissed buyout reports as speculation.

Still, even Cooper Tire Chief Executive Officer Roy Armes has admitted the reports in mid-October caused "a distracting few days for us."

The report, first made by The Economic Times of India, said Apollo was seeking a "controlling stake" in Cooper, possibly for $600 million to $800 million.

The report that Apollo sought only a "controlling stake," not all of Cooper's stock, fueled speculation of a hostile takeover.

"Usually when one firm acquires another, it's for all of the shares outstanding. The fact that the source of the article specifically mentions what it would cost to acquire a 'controlling stake' is more consistent with a hostile bid than a friendly takeover offer," said Taesik Yoon, of Forbes.com, in October.

Apollo is a very successful tire company and "has been expanding rapidly," said one tire industry source who asked to remain anonymous. "It's not illogical to think they would like to have a presence in the U.S.," he said. Apollo Tyres gets two-thirds of its revenue from India but its market in that country is softening along with the economy, Reuters News reported.

Tire makers are under pressure from rising rubber and oil costs and weakening demand, Reuters said. The replacement tire market, which is Cooper's focus, is expected to benefit from growing numbers of aging vehicles in the United States, S&P Capital IQ analyst Efraim Levy told Reuters.

Apollo has nine factories in Asia, Europe and Africa and exports to more than 118 countries, the company reports on its website. It produces passenger car, light truck, truck-bus, off highway and bicycle tires, retreading material and retreaded tires. Its key brands are Apollo, Dunlop and Vredestein.

" Apollo Tyres has a target to become a global top-10 tire maker by 2016 and this deal ... could comfortably get them there," according to Morgan Stanley analysts who were quoted by Reuters.

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