Apollo Tyres said Saturday it still wants to pursue its troubled takeover bid for US firm Cooper Tire after a Delaware court ruled the Indian company was not dragging its feet in closing the deal.
The proposed merger between Apollo and the much larger Cooper Tire & Rubber, which would create the world's seventh-largest tyremaker by revenue, has mushroomed into a bitter clash between the two companies.
The deal, announced in June, landed in court last month over charges by the US firm that its Indian suitor was delaying closing the transaction to wrestle down the $2.5 billion offer price.
Apollo said it was "pleased" the Delaware court on Friday rejected claims by Cooper that the Indian company was in breach of its merger agreement to finalise the deal on October 4.
"Apollo continues to believe in the merits of the combination and is committed to finding a sensible way forward," added the company based in the New Delhi satellite city of Gurgaon.
Apollo is seeking exposure to the massive US tyre market to off-set a slowing domestic market.
Completion of the transaction has been complicated by labour problems embroiling Cooper's US and Chinese operations, lack of financial information about the US firm's Chinese venture and a worsening performance by Cooper's US tyre business.
Apollo has pushed for a price cut, citing changed circumstances since the deal was first struck.
Ohio-based Cooper said in a statement after the court ruling that it was "disappointed" and "assessing its options".
Cooper's shares plunged on the New York Stock Exchange by more than 11 percent to $23.82 on Friday -- far below Apollo's original offer of $35 per share.
The takeover bid at the initial price would be India's biggest for a US company, according data provider Dealogic, and has been seen as another sign of growing Indian interest in overseas acquisitions.
Cooper said in court that the Indian company was suffering from "buyer's remorse".
Apollo denied the allegation but said it would be tough at the current offer price to find lenders to finance the deal due to the problems besetting Cooper.
Cooper said it flagged the risks to Apollo when it made the offer.
The transaction has been mired in trouble over concluding new labour contracts at Cooper's plants in Ohio and Arkansas, a stipulation for the deal to go through.
The transaction has also been hindered by Cooper's recalcitrant Chinese partner who has barred its US managers from plant premises to obtain financial statements.
Workers at Cooper's Chinese joint venture stopped making tyres at the plant to protest the deal.
Apollo's share price has fallen around 20 percent since the deal was announced with analysts saying the company was paying too much for Cooper and would be overloaded with debt.
Analysts compare the acquisition to a minnow swallowing a whale. Apollo had annual revenue of $2.5 billion in 2012 while Cooper's totalled $4.2 billion.