Investors Sue Cooper Tire Over Failed Sale to Apollo

Cooper Tire & Rubber Co. has been sued in Delaware by investors who complain they lost money when the company's share price dropped during a failed sale to India's Apollo Tyres Ltd.

The lawsuit was filed by Timber Hills LLC in Greenwich, Conn., and OFI Risk Arbitrages and OFI Risk Arb Absolute in Paris.

The complaint seeks class-action status and unspecified damages. It claims Cooper executives were enticed by the prospect of becoming millionaires and hid "extraordinary risks" associated with the $2.5 billion sale.

The Findlay, Ohio-based tiremaker announced the buyout in June at $35 per share. But negotiations quickly stalled over labor issues in the U.S. and at a Cooper joint venture in China. Apollo requested a $9-per-share discount. In November a Delaware court refused Cooper's plea to force the purchase, and the company turned to the Delaware Supreme Court.

But last month Cooper abandoned the deal, declaring that the financing Apollo had arranged for the purchase was no longer available. Cooper says it believes the Indian company defaulted on the merger.