The Deal: Union Strikes Deal Over Cooper Plants
Updated from Dec. 12 to account for no agreement with Apollo Tyres. TheStreet regrets this error.
NEW YORK (TheStreet) --The United Steelworkers have an agreement with Cooper Tire & Rubber
The Delaware Court is seeking an update on the status of negotiations between the merger parties and the union Thursday. Last summer an arbitration process determined that the merger of Apollo and Cooper required a renegotiation of labor contracts at two Cooper operations in the U.S., in Findlay, Ohio and Texarkana, Ark. Apollo and Cooper have been at odds with each other in Delaware courts regarding who has hampered the movement of any revised labor agreement.
A source close to the matter said that the USW has worked out tentative agreements with Cooper based on potential outcomes and should the company's holdings end up in the hands of Apollo, part of the deal would include their acceptance of the those terms. The talks with Cooper post-date the arbitration ruling and the legal filings in Delaware, the source said. The USW does have ongoing concerns about the debt associated with the Apollo deal and its potential effect on the long-term viability of the company and its obligations to the workforce, the source said. The agreements to date have not been ratified.
Apollo has previously sought a price cut to accommodate for the economics of settling with the USW, as revealed in the Delaware Chancery Court filings over the merger conflict. The Chancery Court found in early November that Apollo was not in breach of the merger, but that it was obligated to continue to make best efforts to resolve outstanding issues preventing the deal close.
The parties are scheduled for oral argument in Delaware Supreme Court Dec. 19.
The merger agreement has debt commitments from Morgan Stanley, Deutsche Bank, Goldman Sachs and Standard Chartered Bank that expire at the end of the year.
Neither Apollo or Cooper would comment on whether any discussions will ensue regarding the merger terms.
Cooper shares traded Thursday for $23.80. The deal as struck in June values Cooper at $35 per share.
--Written by Scott Stuart in New York
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