Apollo Tyres hits 52 week high after Cooper terminates merger deal

Apollo Tyres Ltd. | Tyres & Allied | Automobiles | BSE: 500877 | NSE: APOLLOTYRE

31 Dec 2013 Evaluate

Apollo Tyres is currently trading at Rs. 104.70, up by 3.40 points or 3.36 % from its previous closing of Rs. 101.30 on the BSE.

The scrip opened at Rs. 111.40 and has touched a 52 week high of Rs. 113.00 low of Rs. 102.55. So far 2267000 shares were traded on the counter.

The BSE group 'A' stock of face value Re 1 has touched a 52 week high of Rs. 113.00 on 31-Dec-2013 and a 52 week low of Rs. 54.60 on 21-Jun-2013.

Last one week high and low of the scrip stood at Rs. 113.00 and Rs. 77.50 respectively. The current market cap of the company is Rs 3166 crore.

The promoters holding in the company stood at 43.50% while Institutions and Non-Institutions held 41.52% and 14.98% respectively.

U.S.-based Cooper Tire & Rubber Co has terminated a proposed $2.5 billion sale to Apollo Tyres with both sides swearing to take legal action over a deal beset by obstacles from the start. Cooper Tire decided to call off the deal after being informed by the Indian tyre maker that financing was no longer available for a takeover that could have been India's second biggest in the United States. On the other hand, Apollo Tyres, was disappointed with Cooper for premature closure of the agreement and has decided to pursue legal remedies of its own.

These threats would ensure continuation of a legal stand-off between the two parties, whose relationship descended into hostility soon after Apollo agreed to buy Cooper for $35 a share in June, hoping to transform itself into world's seventh-largest tyre maker and cut its dependence on domestic sales. With this, it remains to be seen if either company is liable to pay a break-up fee. Under the deal terms, Apollo would have been liable to pay a $112.5 million fee, while Cooper could be held responsible for break-up fee of $50 million.

However, despite the company showing the disappointment with premature closure of the deal, its shareholders, which right from the start of the deal had raised concerns over the debt-funded acquisition of a company that was nearly three times its stock market value at that time, have welcomed this news.