Apollo Tyres extends gain on Cooper deal uncertainty

The stock has rallied over 8% in past two trading sessions on the National Stock Exchange.

Apollo Tyres is trading higher by 3% at Rs 71.70, extending its previous day’s 5% rally, on reports that the company was looking to renegotiate the value of its $2.5-billion deal to acquire US-based Cooper Tire & Rubber Co (CTB) due to persisting labour issues at the CTB’s Chinese and American facilities.

Apollo Tyres has accused CTB of misrepresenting the facts about its Chinese operations and also of unwillingness to give concessions to US workers union to take the deal forward.

According to a statement by Apollo Tyres, CTB has breached material representations and covenants with respect to its China subsidiary given the fact that it has no control over the subsidiary or access to its books and records. While Apollo Tyres remains committed to close the deal in a timely manner and, it is first seeking a confirmation from the CTB management that it has sufficient control over and access to its China.

The stock opened at Rs 71.60 and touched high of Rs 72.20 on the NSE. A combined around one million shares change hands on the counter till 0930 hours on the NSE and BSE.