Cooper-Apollo spat forces investors to pick lanesInvestors in Cooper Tire & Rubber are being forced to pick lanes. Legal wrangles have put Apollo Tyres' agreed $2.5 billion offer for its US rival in doubt, and tensions at its China joint venture have undermined Cooper's value. But a negotiated price reduction still looks possible. Cooper shares may be pricing in too much bad news.Cooper shareholders must choose between four broad outcomes. The least likely is that the deal goes ahead on the agreed terms of $35 per share. Apollo has made it clear that it would like a lower price. Its lenders are also getting cold feet.If the deal falls apart, Cooper shares might be expected to fall back to their pre-bid price of $24.50. But the wrangle with Apollo has exposed the US company's less-than-firm grip on its Chinese joint venture, which contributes around a quarter of its parent's revenue and earnings. Assume the subsidiary's value is reduced by 25 per cent, and Cooper's standalone value

Deflated expectations

Reuters

Tyremakers' takeover spat faces high tollApollo Tyres' spat with its US target could face a high toll. The Indian firm wants to renegotiate its $2.5 billion takeover of Cooper Tire & Rubber following protracted disputes with workers in the United States and China. Cooper has gone to court to force its suitor to pay up. In this fight, a compromise looks like the least bad outcome.The Indian firm appears to have applied the brakes after underestimating the risks of a backlash by Cooper's workers in two countries. The situation in China is particularly acute: employees have locked out the management and Cooper's minority partner is seeking to dissolve the joint venture. Apollo now admits that resolving the dispute could pile "significant and unprecedented costs" onto what is already a highly-geared transaction. Meanwhile, a US arbitrator has ruled that the Indian company must reach an agreement with workers at two plants in Ohio and Texas in order for that part of the deal to proceed.

Skid marks

Apollo Tyres' $2.5 bn takeover is piling up risks

Puncture risk

Business Standard

Abenomics opens a capital window for Japan Inc

Testing pane

West Asia turmoil perpetuates Opec charade

Helpful turmoil

The West faces only high-cost options in Syria

No return

Gulf aid dulls Western leverage over Egypt

The power of money

Small change

Military throws Egypt into dangerous phase

The Arab winter

Iranians put hopes for change in pragmatic insider

With the Supreme Leader's permission

Etihad bets on India in pricey Jet Airways deal

Co-pilots

Target shortage feeds desperate Mideast telco M&AA scarcity of takeover targets is feeding a desperate scramble in Middle East telecoms M&A. Bahrain's incumbent operator Batelco is eyeing a stake in the enterprise unit of India's Reliance Communications. It comes just months after agreeing a deal worth $1 billion to buy assets spanning 12 markets, including Monaco and the Channel Islands, from Cable & Wireless. Batelco's pick-and-mix takeovers are symptomatic of a market where too many big telcos are chasing too few assets.Batelco is in search of stable cash flows amid fierce competition in its home market. Bahrain accounts for 60 per cent of revenue but profit there fell by almost one-third in 2012. Cash flow is weakening and the cash dividend payout ratio has fallen from 75 to 60 per cent in just two years.The problem is that Batelco, with a market value of just $1.6 billion, is a minnow in the Middle East. It lacks the financial firepower to compete for the few assets th

Desperate call

Brotherhood faceoff with Sawiris is bad for Egypt

Bidding billionaires goodbye

Qatar seeks to spread the wealth with IPO bonanza

Social IPOs

Dubaiâ€™s new boom assumes short memories

Spinning the wheel

The deadly chaos in Egypt marking the second anniversary of the uprising shows that the transition in the Arab world&rsquo;s most populous country will be long and painful. The anti-government violence in several cities along the Suez Canal, which has left 49 people dead and parts of the country in a state of emergency, is rooted in a deep distrust of the country&rsquo;s basic institutions. That&rsquo;s a problem the Muslim Brotherhood government cannot afford to ignore any longer.

Death, distrust, disorder

Qatar is dodging its shareholder duty. The emirate successfully used its muscle to extract better terms from Glencore in the commodity traders&rsquo; union with miner Xstrata. But the decision to vote in favour of the merger while abstaining on a side vote on retention bonuses makes Qatar Holding seem inconsistent at best.

A job half well-done

Mohamed Mursi&rsquo;s pharaonic blunder has thrown Egypt into chaos. The protests against the Islamist president&rsquo;s power grab to &ldquo;protect the revolution&rdquo; show he has misjudged civil society&rsquo;s craving for democratic institutions. His authoritarian moment threatens to destroy the fragile stability that has held in the country during the two years since the popular uprising. And, it puts further strains on the weak economy.

Black Sunday

Ousting dictators doesn&rsquo;t come cheap. Between 2011 and 2015 the total lost economic output in Egypt, Libya and Tunisia is expected to amount to $225 billion. That is at least 10 per cent of the cumulative GDP estimated by the International Monetary Fund in 2010 for those five years. The Reuters Breakingviews calculation of the loss for those countries is based on 2012 forecasts.

The price of change

Autocrats and strongmen have long held the whip hand in global energy. Now, democracies are starting to outclass countries like Iran, Venezuela and Russia in oil and gas production. That should reduce the economic and political influence of authoritarian states. And, the West&rsquo;s booming output ought to steady fuel prices, a rare boon for the global economy.

Energy authoritarians

Abu Dhabi&rsquo;s Etihad Airways is spoilt for choice in India: It could decide to be a white knight to billionaire Vijay Mallya&rsquo;s beleaguered Kingfisher Airlines. Or the Gulf carrier could snap up a smaller stake in Jet Airways, which controls a quarter of the domestic Indian market. The latter looks the better bet.

Una Galani