Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Cooper Tire & Rubber plunged 12.5% today on problems over its agreement to be acquired by India's Apollo Tyres for $35 per share.

So what: Apollo wants its bid for Cooper to be reduced substantially because of "significant and unanticipated costs" relating to labor negotiations and a disagreement with the company's Chinese joint venture partner, raising plenty of concern among Cooper investors that the deal is in jeopardy. Apollo said that Cooper has acknowledged that some price cut is warranted, but Cooper denied ever saying that, suggesting that the situation is getting a bit ugly.


Now what: Cooper has since filed a complaint in Delaware Chancery Court to force Apollo to quickly close the deal. "The situations with the United Steelworkers (USW) and the joint venture partner and union in China are a direct result of the merger agreement, and are risks Apollo assumed under the merger agreement," Cooper said in a statement. "Cooper looks forward to closing this compelling transaction, which will provide multiple benefits to both organizations, their employees, customers and communities." Given all the uncertainty surrounding the deal, however, Fools would do well to watch everything unfold from the sidelines.

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The article Why Cooper Tire Shares Skidded originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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