Cooper Tire sued by investors after failed sale to Apollo
WILMINGTON, Del. (Bloomberg) -- Cooper Tire & Rubber Co. was sued by investors who say they lost money when the shares declined during a failed sale to India's Apollo Tyres Ltd. for $2.5 billion.
Cooper executives hid "the extraordinary risks" that doomed the buyout, OFI Risk Arbitrages and OFI Risk Arb Absolute, both based in Paris, and Timber Hill LLC of Greenwich, Conn., said in a Jan. 17 complaint filed in federal court in Wilmington, Del.
Company officials, "enticed by an enormous payout that would make them all multimillionaires, went to great lengths to push through a sale" to Gurgaon, India-based Apollo, touting optimistic projections that they knew "were false and misled investors," according to the complaint.
The original offer was $35 a share. The shares fell as difficulties with steelworkers' unions and a Chinese unit emerged. Cooper shares closed at $23.15 on Tuesday.
"Cooper has complied with all applicable laws and regulations," Anne Roman, a spokeswoman for the Findlay, Ohio, company, said in an e-mailed statement.
The suing investors seek class-action status for similar shareholders, a jury trial and unspecified damages.
Cooper announced the sale in June and sued in Delaware Chancery Court after Apollo failed to complete it. Chancery Judge Sam Glasscock ruled that Apollo had fulfilled its obligations to try to resolve union disputes.
Cooper called off the deal in December, saying it would seek damages and that the transaction lacked financing.Contact Automotive News