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Cooper Tire & Rubber Co. Message Board

  • stilltrying2us stilltrying2us Oct 1, 2013 9:35 PM Flag

    Sure gain at 35.00

    Why aren't people buying this stock now when they know the buyout price is going to be 35?
    That's almost a 4.00 guaranteed profit, right?
    What's up?

    Sentiment: Strong Buy

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    • believerinbalancesheettrends believerinbalancesheettrends Oct 2, 2013 4:38 PM Flag

      CTB's Apollo Deal Wins Shareholders' Nod - Analyst Blog, 12:30p ET October 1, 2013 (Zackscom)

      Cooper Tire & Rubber Co.’s (CTB) merger with Apollo Tyres Ltd. has received an astounding 96% support of the voting shareholders of the company. Voting rights were exercised for around 78% of the outstanding common shares, of which 48 million or 74% were in favor of the deal.

      The merger is expected to close by the end of 2013. The resulting company will be the seventh-largest tire company in the world with presence in various lucrative markets such as North America, India, China, Latin America and Africa. Currently, Cooper Tire is the 11th largest tire company in the world, on the basis of revenues.

      The acquisition of Cooper Tire by a wholly owned subsidiary of Apollo Tyres was announced in Jun 2013. The transaction was approved by the board of both companies before the deal was made public. Thereafter, the deal received clearance from both U.S. and foreign regulatory bodies.

      The purchase consideration for the all-cash transaction amounted to $2.5 billion.

      Apollo Tyres will pay $35 per share to the shareholders of Cooper Tire, which includes a 40% premium on the 30-day volume-weighted average price of Cooper Tire at the time of the announcement of the deal.

      The acquisition will result in benefits of operating scale, sourcing benefits, technology, product optimization, and manufacturing improvements, which are expected to boost earnings before interest, taxes, depreciation and amortization (EBITDA) by $80-120 million per annum after 3 years.

      However, the earnings of Apollo Tyres are expected to increase post the acquisition.

      However, the deal is facing opposition from Cooper Tire’s Chinese joint venture. The Chinese workers feel that the deal will jeopardize their employment and are seeking dissolution of the joint venture.

    • Still needs to get through the union issues (not sure if there is a caveat in the purchase contract for it that Apollo can back out without paying break fee) which may delay this to 1Q 2014. The Indian gov't (funding) and FTC (monopoly) do not need to approve this.

      I doubled up when it dropped down under $29 last week. Holding out for it to go to $34 by year-end deal or no deal. Only drop could be from 3Q results first week Nov. if not good (which may be from China strike).

    • I've been trying to figure out the same thing. The vote is done with a 74% approval, plus they also said the deal would be done before the end of the year. No one else wants 10% in the last quarter of the year? If someone knows something the rest of us are missing, please post.

      Sentiment: Strong Buy

32.68-0.12(-0.37%)Jul 28 4:02 PMEDT