Cooper Tire announced on 12 June that it would be bought by Apollo Tyres for $35 a share, and sued after the buyer failed to close the deal. Photo: Bloomberg
The state supreme court in Dover issued a one-page order on Tuesday, signed by Justice Randy J. Holland, dismissing the appeal of a ruling by the Delaware Chancery Court.
Cooper announced 12 June that it would be bought by Apollo for $35 a share, and sued after the buyer failed to close the deal. Chancery judge Sam Glasscock ruled last month that Apollo Tyres fulfilled its obligations to resolve related disputes with a US labour union.
This interlocutory appeal was improvidently accepted, Holland wrote in Tuesday's decision, which came three days before a hearing was scheduled at the court.
Cooper shares, which fell as much as 9.7% after the ruling, dropped 5% to $21.62 in New York on Tuesday.
"My gut tells me the supreme court said, 'This is a mess; it's not appropriate to spend our time on'," Larry Hamermesh, a professor at Widener University School of Law and a former lawyer at the US Securities and Exchange Commission, said in a phone interview.
'Slog' out
The case will go back to Chancery Court for the parties to slog it out, according to Hamermesh. "I've been saying all along, don't count on $35 coming out of this."
As an alternative to a settlement or paying what it originally agreed, Apollo could hand over a $112.5 million reverse breakup fee to walk away, according to Cooper's complaint.
Tuesday's action was not a decision on the merits of the issue on appeal, but instead was a procedural ruling, Anne Roman, a spokeswoman for Findlay, Ohio-based Cooper, said in an emailed statement. She said both parties will return to Chancery Court to resolve the remaining questions in the case.
Cooper believes Apollo has breached the merger agreement and we will continue to pursue our legal options, she said.
Samantha Verdile, a spokeswoman for Apollo, had no immediate comment on the decision. Bloomberg
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