Cooper Tire & Rubber Co (CTB) is currently trading for $31 despite the fact that India's Apollo Tyres Ltd. has entered into a definitive merger agreement to acquire the company for $35 per share. There has been a lot of noise surrounding this deal, but it is probable that it will close by the end of November for an annual net return of over 50%.
Apollo Tyres is paying a little over 4x EV/EBITDA for CTB, which is cheap compared to the 7x EV/EBITDA deal multiple for historically comparable transactions.
The deal required HSR approval in the US as well as approval in Germany, Mexico, and Ukraine. On July 15, 2013, the deal...