News Archive

SEC insider trading trial against Mark Cuban set to begin

Mon Sep 30, 2013 2:14pm EDT

DALLAS (Reuters) – Jury selection began on Monday in the civil trial of Mark Cuban, the billionaire owner of the Dallas Mavericks NBA basketball team, who faces charges of insider trading in shares of a little-known Internet search company nearly a decade ago.

Cuban, 55, is accused of selling his 600,000 shares of the former Inc on June 28 and 29, 2004, soon after learning from Chief Executive Guy Fauré that the company was planning an equity offering that could dilute his 6.3 percent stake.

The U.S. Securities and Exchange Commission said Cuban avoided a roughly $750,000 loss after the Montreal-based company announced the offering, causing its stock price to drop 9.3 percent on June 30.

Cuban has maintained that he did nothing wrong, and that any information he may have received was neither confidential nor material enough to trigger an insider trading violation.

The jury trial before U.S. District Judge Sidney Fitzwater in Dallas is expected to last eight to 10 days, court papers show. The trial could stretch into mid-October, with breaks.

Jury selection, which started shortly after 9:30 a.m. local time (CDT) on Monday, is expected to conclude in time for opening statements to be made later in the day.

Cuban arrived at court wearing a navy blue suit and tie and telling reporters, “I won’t be bullied,” according to video by CNBC.

While the SEC has recently become more aggressive in pursuing higher-profile defendants, Monday’s trial comes in a case that predates that push, having begun in November 2008.

Forbes magazine estimates Cuban’s net worth at $2.5 billion.

The SEC is seeking to recoup ill-gotten gains, impose civil fines and obtain a permanent injunction to bar Cuban from similar alleged misconduct.

Fitzwater dismissed the SEC lawsuit in 2009, but a federal appeals court revived the case the following year.

Cuban is expected to testify, as is Fauré. Under procedures set by the judge, it is possible that Cuban may testify twice, once during the SEC’s presentation of its case and later when the defense takes its turn.

The charismatic Cuban is one of the stars of the ABC television show, “Shark Tank,”, and has appeared on other TV shows such as ABC’s “Dancing with the Stars” and HBO’s “Real Time with Bill Maher.” He is known for arguing with referees during Mavericks games.

He previously accused SEC enforcement staff of targeting him because of his fame and because they disliked his politics, but an SEC watchdog in 2011 cleared the regulator of misconduct.

The case is SEC v. Cuban, U.S. District Court, Northern District of Texas, No. 08-02050.

(Additional reporting by Jonathan Stempel; Editing by Karen Brooks and Carol Bishopric)

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Investors cut U.S. stocks, bonds on policy uncertainty

Mon Sep 30, 2013 7:08am EDT

LONDON (Reuters) – Global investors cut allocation to U.S. equities and bonds this month as uncertainty about U.S. monetary and fiscal policies grew, a Reuters poll showed on Monday.

September’s global asset allocation poll also showed investors boosted euro zone equities for a third month in a row to levels not seen since March 2012, thanks to a brighter economic outlook in the region.

The poll was conducted September 13-26. That was either side of the Federal Reserve’s surprise decision to keep its monetary stimulus intact this month but before weekend events in Rome and Washington intensified fears of a U.S. government shutdown and the collapse of Italy’s coalition government.

Some 54 investors from the United States, Europe and Japan cut allocation to U.S. stocks to a four-month low of 41.7 percent, from 42.9 percent in August. Bond weighting in the region fell to 37.5 percent, a level not seen since December.

World stocks received a brief boost from the Fed’s September 18 announcement that it would keep the size of its monthly bond-buying unchanged. But the support faded as uncertainty grew over when the U.S. central bank will start withdrawing its hefty monetary stimulus, and by how much.

Coupled with concerns over U.S. budget talks, investors largely adopted a wait-and-see stance.

“Most firms are coming to the question of how much upside is there left in the near-term and whether it is worth the risk to invest here,” said Douglas Gordon, senior investment strategist at Seattle-based Russell Investments. “Everyone is waiting to hear more from the Fed about its plans.”

Investors had 36.6 percent of their global balanced portfolios in bonds in September, largely unchanged from August’s 36.5 percent. Equity allocation remained steady at 50.7 percent and cash dipped to 5.9 percent.

Investors cut equity holdings in emerging Europe to 1.6 percent, the lowest since November. The region’s economies are suffering from slowing growth, while capital flows out of developing markets have left many of them at risk of balance of payments problems.

The bright spot was euro zone equities, where investors increased their allocations for a fourth straight month to 17.3 percent, the highest reading since March 2012.

“(The Fed) decision has added uncertainty and probably more volatility for the last quarter. There will be a tapering but we do not know when and (by) which amount. Discussions around debt ceiling will also add volatility in that context,” said Nadege Dufosse, cross asset strategist at Dexia Asset Management.

“This should give us opportunities to reinforce our exposure to equity markets.”


The threat of a government shutdown kept U.S. investors defensive, with investors reducing equity holdings US/ASSET to 56.1 percent – the lowest since at least April 2007.

Japanese fund managers raised equity allocation in Asia and the United States and cut overall bond weighting to a 16-month low. Average equity holdings hit a 16-month high of 44.0 percent and Asian weighting increased to 7.4 percent JP/ASSET.

European fund managers EUR/ASSET pulled money from emerging Asian and U.S. stocks and boosted equity holdings at home where growth momentum is accelerating. Overall equity allocation rose for a third month in a row, to 47.5 percent on average.

British investors GB/ASSET had an average 14.7 percent of their global equity portfolios invested in the euro zone this month, and some 18.1 percent of global bond portfolios – levels not seen since 2011.

(Additional reporting by Tom Bill in London, Pia Quaglia Regondi in Milan, Sarmista Sen and Rahul Karunakar in Bangalore and Ayai Tomisawa in Tokyo; Editing by Catherine Evans)

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Plenummedia Raises $6.5M To Help SMEs In Spain And LatAm Do Business Online, More Acquisitions Expected

Screen Shot 2013-09-29 at 16.00.28

More investment activity from Seaya Ventures, after it participated in OpenTable competitor Restalo’s recent $10 million Series B round. This time the Spanish VC is leading a $6.5 million Series B round for Plenummedia, which claims to be the leader in the Spanish “Do-It-For-Me” SME market.

The Madrid-headquartered company provides a full suite of technology tools and services to help small and medium sized companies do business on the Internet, ranging from desktop and mobile websites, email, SEO, Social Media to SEM.

Plenummedia says it plans to use the additional funding, adding to the $4 million it had already raised from private investors, to accelerate growth in Mexico and expand into other LatAm countries. It will also use the new capital to power what it’s calling a “Buy Build” strategy that should see it add to the four acquisitions it’s already made over the last 18 months to enable it to bolster its proposition to SMEs.

We should also note that Seaya Partner Michael Kleindl is President and co-founder of Plenummedia, as well as being a previous backer, so the choice of investor isn’t all that surprising.

Calling Plenummedia a one-stop-shop, CEO and co-founder Juan Muñoz Blanco says the startup’s strategy is based on two main assumption. “First, small and medium sized business owners in Spain and LatAm do require service, so we totally believe in the ‘Do-It-For-Me market’,” he says. “Secondly, SME customers do want a fully integrated solution, they do not want the hassle of dealing with different providers for web, mobile, email, SEO, SEM, Social Media etc. Thats why we are building a fully 360 Degree Service and Technology offering tailormade for the SME market.”

Founded in 2009, Plenummedia claims to have broken even in Q1 of 2013, despite having 180 employees in Spain and Mexico. It has 10,000 customers in the two countries it operates in, pointing out that many of these produce reoccurring revenue based on the company’s service model.

Echoing the sentiments of new investor Seaya Ventures, the Plenummedia CEO is also talking up the opportunities offered by the LatAm market, noting that it’s “hugely under-penetrated” and immature in “all areas of digital”, not least in the SME segment, while the main economies are growing at a decent rate and are politically stable. “In our business, contract loyalty, low bad debt rates and relatively low cost of operation favours our model,” he adds.

But, perhaps best of all, there’s “almost no competition”, with Plenummedia’s largest competitors, Reach Local and Yodle, yet to enter the region.

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Rosneft offers lowball $1.5 billion for TNK-BP minorities

Mon Sep 30, 2013 6:27am EDT

MOSCOW (Reuters) – Oil group Rosneft (ROSN.MM) is to buy the remaining shares in TNK-BP Holding (TNBP.MM) for a fraction of the price it paid BP (BP.L) and a group of oligarchs for their stakes, in a worrying development for minority shareholders in Russian companies.

Rosneft bought the holding company and its parent TNK-BP last year in a $55 billion takeover that created the world’s largest publicly traded oil company by output. Minority shareholders own about 5 percent of the unit, now renamed RN Holding.

The deal to buy them out for about $1.5 billion was announced by Rosneft on Monday, after months of tough talk and refusal to acquire the shares had sent jitters through the investor community and raised questions over corporate governance in Russia.

“It will leave a bad impression and raises concerns,” said Chris Weafer, senior partner with consultancy Macro-Advisory.

“The next time a big state company is looking at an acquisition of a company, the investors will be immediately very wary of that situation. Minority investors will run … rather than wait and see what will happen.”

Rosneft said it planned to buy out holders of ordinary shares at 67 roubles ($2.07) per share and preferred shares at 55 roubles, the company said. In response, TNK-BP ordinary shares rose by almost 5 percent on Monday to 63.3 roubles, while Rosneft was down 1.27 percent.

But the offer disappointed some investors hoping to get closer to the $3.70 a share analysts calculated that oligarchs including Mikhail Fridman received at the time of the TNK-BP buyout. The other tycoons were German Khan, Viktor Vekselberg and Len Blavatnik.

“The offer is not that generous compared to the $3.70,” said one shareholder who spoke on condition of anonymity, but did not comment on whether further steps would be taken.

“This is a bad offer,” said Weafer. “The price they are offering to the minorities is almost half what Rosneft paid to BP and the oligarchs… and it sends a negative message.”


Rosneft and its powerful president, Igor Sechin, had repeatedly said that the company had no obligation to buy the remaining shares. Sechin has said that Rosneft is not a “charity fund”.

He changed his tone on Friday, however, saying that the company would consider buying the shares with a 20 to 30 percent premium to the market price.

Sources close to the minority shareholders have told Reuters that they think Rosneft should buy them out for $2.8 billion, based on what it paid for its majority stake in TNK-BP.

Sberbank CIB analysts said in a note: “The only shareholders who will benefit from this are speculators who bought the shares on the cheap during the long period of uncertainty – precisely the people whom Sechin said he wanted to punish.”

Russian stocks trade at a near 50-percent discount to those of other emerging nations, reflecting foreign investors’ worries over corruption, corporate governance and stalled efforts to modernize the economy.

Concerns about the treatment of minority shareholders have added to that sentiment.

Veteran investor Mark Mobius, executive chairman of Franklin Templeton’s emerging markets group, said earlier in the year that the TNK-BP buyout “is the kind of issue that gives pause for thought on the behalf of investors coming to Russia”.

Mobius, whose emerging markets fund has invested in TNK-BP, has around $1.2 billion invested in Russia. He was not available for immediate comment about Monday’s offer.

($1 = 32.3337 Russian roubles)

(Additional reporting and writing by Megan Davies; editing by Mark Trevelyan)

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Political strife in U.S. and Italy sparks search for safety

Mon Sep 30, 2013 12:48pm EDT

NEW YORK (Reuters) – Global stock markets fell and the dollar dropped against major currencies on Monday as a partial U.S. government shutdown loomed, with passage of an 11th hour stop-gap spending bill seen as unlikely.

The Democrat-controlled U.S. Senate was poised to reject a Republican funding measure that would delay “Obamacare” health reforms. A simple majority vote was scheduled for shortly after 2 p.m. that would strip Republican amendments and send a “clean” funding bill back to the House of Representatives.

House Speaker John Boehner showed no sign of backing down from Republican insistence on linking a funding bill to a delay in President Barack Obama’s signature health-care law.

If a funding deal was reached soon markets might recover, but a prolonged shutdown could have a major impact on the economy and consumer confidence. As many as 1 million U.S. federal employees could face unpaid furloughs or payless pay-days.

“The size of the sell-off is logical given the stakes,” said Nicholas Colas, chief market strategist at the ConvergEx Group in New York.

The dollar last traded 0.45 percent lower against a basket of six major currencies at 80.163 .DXY and was near break-even against the yen, up 0.02 percent at 98.26 yen. The euro rose 0.12 percent at $1.3537.

MSCI’s all-country equity stock index .MIWD00000PUS was down 0.73 percent, while the broad FTSEurofirst 300 index .FTEU3 of regional shares closed down a provisional 0.6 percent at 1,247.14.

The Dow Jones industrial average .DJI was down 109.79 points, or 0.72 percent, at 15,148.45. The Standard Poor’s 500 Index .SPX was down 8.87 points, or 0.52 percent, at 1,682.88. The Nasdaq Composite Index .IXIC was down 9.77 points, or 0.26 percent, at 3,771.83.

Defense names declined, as a prolonged government shutdown would most likely diminish the amount of new contracts being granted. Raytheon Co (RTN.N) fell 1.1 percent to $77.33, and Lockheed Martin Corp (LMT.N) fell 1.2 percent to $127.64, while Boeing Co (BA.N) slipped 2.3 percent to $117.20.

The PHLX defense sector .DFX was off 0.83 percent.

Wall Street has weathered similar incidents in the past. During a shutdown from December 15, 1995, to January 6, 1996, the SP 500 added 0.1 percent. During the November 13-19, 1995, shutdown, the benchmark index rose 1.3 percent, according to data by Jason Goepfert, president of

That pattern of gains may not hold this time, given that economic growth continues to be weak. Wall Street may also be ripe for a sell-off, with the SP near an all-time high after having escaped any sustained pullback so far this year.

In the latest economic data, the Chicago Purchasing Managers index rose more than expected in September, climbing to a reading of 55.7 from 53 the previous month. Analysts were expecting a reading of 54.

Fears of a U.S. government shutdown supported safe-haven demand for bonds, sending benchmark yields to their lowest in seven weeks.

U.S. government debt was on track to post its first monthly gain since April and to eke out its first quarterly rise since a year ago, according to Bank of America Merrill Lynch.

“The best way to say what the market is doing right now is that it’s pricing in a partial government shutdown,” said John Herrmann, director of interest rates strategy at Mitsubishi UFJ Securities in New York.

U.S. Treasuries prices fell, with the benchmark 10-year U.S. Treasury bond off 3/32 in price to yield 2.6372 percent.

Brent crude oil fell, heading for its first monthly decline since May, as the looming U.S. government shutdown clouded the outlook for demand, while tensions over Iran continued to ease.

Brent was down 83 cents to $107.80 a barrel. U.S. crude was down $1.14 at $101.73 a barrel.

(Additional reporting by Richard Hubbard in London, and Ryan Vlastelica and Richard Leong in New York; Editing by Dan Grebler and Leslie Adler)

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Davis raises US$1 bn for mining company

Former Xstrata plc chief executive Mick Davis’ new mining company has raised US$1 billion from trading company Noble Group and private equity firm TPG.

Davis’s new outfit, called X2 Resources, will receive US$500 million each from Noble and TPG.

X2 has been created to “seek value creating opportunities in the mining and metals sector”.

Analysts say Davis is keen to re-create the success of Xstrata which he built from scratch into a US$50 billion company.

Davis, together with former Xstrata chief financial officer Trevor Reid, as well a team of executives “responsible for the creation of Xstrata” would lead the X2 team, according to the company.

“We are pleased that Noble and TPG share our enthusiasm for this enterprise…. at this opportune time,” Mick Davis said.

The partners are in discussions with other potential investors looking to buy into X2 Resources.

Davis and Reid left Xstrata shortly after Glencore plc’s takeover of the company earlier this year, in addition to a host of other executives.

Noble already has mining and metals interests, in addition to its trading portfolio, while TPG has US$55.3 billion of assets under management.

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CITIC restarts troubled Sino iron-ore project

Chinese company CITIC Pacific Ltd said it was moving into production at its Sino iron-ore project in Western Australia after it suspended commissioning of the mine in June following on-going problems.

CITIC said commissioning of production line 1 at the magnetite project resumed in late July, and that the line had been running well and producing “good quality concentrate”.

“We are now moving into the production stage (at Sino),” CITIC said.

The company said it had also resumed commissioning of a second production line on September 27 and that the line had been “running well”.

“This production line will be further fine-tuned during the commissioning process. More data will be collected to gain further insight into the production parameters, line stability and reliability,” CITIC said.

The Hong Kong-listed company, controlled by the Chinese state, produced first concentrate at Sino in November 2012, after years of delays caused by operational problems and legal disputes.

The Sino project, which is expected to produce 24Mt/y of iron-ore concentrate, was initially expected to cost US$3 billion and be completed in 2009. However, a rising Australian dollar, labour shortages and inflation led to postponement and a significant cost increase.

The final price tag for the project is now expected to be at least US$7 billion, although some analysts have suggested it could be about US$10 billion.

The Sino mine will supply iron-ore concentrate to CITIC’s Chinese steel mills, as well as other plants in the country.

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The Collaborative Power of Berlin-Based ResearchGate


It’s not often you come across a founder that measures startup success by winning the Nobel Peace Prize one day. When ResearchGate founder Ijad Madisch said that to Benchmark partner Matt Cohler a few years ago, he knew that his startup, which has developed a communication and crowdsourcing platform by which scientists can share and publish their research, was going to potentially change the way we solve real world problems with scientific collaboration. Flash forward two years, and Berlin-based ResearchGate is actually seeing progress being made in areas like disease, terrorism and more from collaborations and shared knowledge taking place on its platform.

Madisch joining us on stage at Disrupt Europe in late October, in Berlin, with a conversation with his board member and early investor Cohler.

One of major challenges to plague scientific research and innovation is redundancy. A team of scientists hard at work on protein data analysis publish their results only to learn that a group on the opposite side of the world has just done the same. The collaborative web changes this. As both a physician and a researcher, Madisch decided that the best way to reduce research redundancy would be to create an online professional network in which scientists could easily share data, information and results.

Investors have caught wind of the power of ResearchGate, and to date, the company has raised over $35 million from Benchamrk, Microsoft founder Bill Gates, Tenaya Capital, Dragoneer Investment Group, Thrive Capital, Accel Partners, Simon Levene, Bebo co-founder Michael Birch, Founders Fund, and Yammer CEO David Sacks, among others. The fact that Gates, who doesn’t rarely invests in startups with his personal wealth, is betting on ResearchGate is a big deal.

Matt Cohler
General Partner, Benchmark

Matt Cohler is a General Partner at Benchmark. He’s responsible for identifying investment opportunities in Internet-related companies, in addition to working closely with companies across the firm’s portfolio.

At Benchmark, Matt has partnered with entrepreneurs from across the social, mobile and cloud industries from around the globe such as Instagram, Dropbox, Quora, Asana, Domo, Edmodo, Baixing, CouchSurfing, Peixe Urbano, ResearchGate, 1stdibs, and Zendesk.

Prior to joining Benchmark he served as the VP of Product Management at Facebook, where he led the development of new strategic initiatives for the company. As the seventh employee at Facebook, Matt played a crucial role within the team during many critical growth phases. Previously Matt was Vice President and General Manager at LinkedIn, where he was a member of the founding team. Matt also has been a consultant in McKinsey Company’s Silicon Valley office and worked in Beijing for AsiaInfo, the Chinese startup that built the infrastructure for the Internet in mainland China. Matt’s writings on the startup economy have been published in Harvard Business Review. He holds a bachelor’s degree with honors and distinction from Yale University.

Ijad Madisch
Co-founder and CEO, ResearchGate

Ijad Madisch is the co-founder and CEO of ResearchGate, the social networking site for scientists and researchers to share papers, ask and answer questions and find collaborators.

Ijad holds a M.D. and Ph.D., and studied medicine and computer science in Hannover at Harvard University. In 2005 he received the RSNA Young Investigator Prize for his work on ultra high-resolution CT Imaging of tissue-engineered bone growth.
After several years in Boston, where he worked as a radiology researcher at the Massachusetts General Hospital, Ijad moved to Berlin and founded ResearchGate in 2008. The company is now based in Berlin and has offices in Cambridge, Mass. Ijad has stated that he wishes to win a Nobel Prize through the site by disrupting the way in which science is conducted.

As we mentioned above, the real power of ResearchGate is in the actual discoveries and advancements in science being made through the platform. Here are just a few of the many examples of how ResearchGate is changing scientific collaboration.

  • Emmanuel Nnadi (Nigeria) and Orazio Romeo (Italy) recently discovered a deadly pathogenic plant yeast together. This yeast killed a 38-day-old baby girl in Emmanuel‘s hometown in Nigeria. It was the first time report of a death caused by this pathogen. Orazio and Emmanuel sent the yeast to a lab in the Netherlands where it‘s currently being investigated further. The unlikely team who got to know each other through ResearchGate previously found the first time occurrence of another pathogenic yeast in Nigeria, and published a paper about it in a peer-reviewed journal.
  • Rafael Luque, professor for organic chemistry at the University in Cordoba and Rick Arneil Aracon, graduate student from the Philippines also found each other in a forum. The unlikely pair discovered that the leftovers of corncobs make highly effective and eco-friendly catalysts for bio-fuel made from old cooking oil and published a paper on the technique.
  • David Chau stumbled into a discussion that had a huge impact on his current project. Through ResearchGate, he managed to connect with colleagues from different departments within his university and, as a result, gain access to equipment for the experiments he was conducting. He is now working on a new technique to detect tiny quantities of water in biological samples.
  • Hector Vazquez-Leal, professor for applied mathematics at the University of Veracruz in Mexico, was looking for a research partner on ResearchGate. Here he found Guillermo Fer Andez-Anaya. They collaborated and discovered a new solution to Troesch’s Problem which allows the improved determination of the movement of gas in a confined environment. They published their result in a peer-reviewed journal. Vazquez-Leal is currently working on two more projects in the same field with
    research partners he found on the network.
  • Sohail Malik (Political Science and Engineering, Pakistan) was looking for help in statistics, when he found Michael Sandholzer (Radiologist, UK) on ResearchGate. Together, they worked on Malik’s project to identify risk factors generating terrorism and insurgency in Pakistan. Their article has been accepted by a peer-reviewed journal and will appear in 2014.

“ResearchGate will change how we conduct science in the future,” says Madisch. He says that similar to the way that developers can code on engineering projects from across the work, there is the same opportunity in the scientific world.

Madisch tells us that 56 percent of research papers published in 2013 include an author that is on ResearchGate. From 2008 to 2011, 1.4 million papers were added to the profiles of scientists on ResearchGate. Now the network is seeing 1.4 million papers added each month, with 27 million papers uploaded in total. And much of the collaborative power is in sharing the raw data between scientists, and Madisch says that every two days, 1,300 data sets are uploaded. “The engagement is just growing exponentially,” he says.

However, ResearchGate isn’t the only company to have recognized the power of this collaboration— is also competing in the space.

How Madisch will continue to grow ResearchGate as a network, and use technology for this purpose will be part of the discussion with Cohler on stage at Disrupt. And we’ll also hear from him about the challenges and benefits of starting and maintaining a startup in Europe (Cohler believes Berlin will be the next big startup ecosystem).

Disrupt Europe will take place from October 26-29 (Hackathon on 26-27; Main Event on 28-29) and lots more info can be found here.

If you would like information on sponsorship opportunities, please contact our sponsorship team here or get more info here.

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Cooper shareholders set to approve $2.5 billion Apollo deal

Mon Sep 30, 2013 2:09am EDT

(Reuters) – Cooper Tire and Rubber Co (CTB.N) shareholders will likely approve on Monday the U.S. company’s $2.5 billion sale to India’s Apollo Tyres (APLO.NS), in a transaction that is expected to create the world’s seventh-largest tyre maker.

A green light from Cooper shareholders will bring Apollo one step closer to completing the takeover, although hurdles still remain due to opposition from workers at Cooper’s joint venture in China and U.S. labour issues which could delay the deal.

Shareholders stand to receive $35 per Cooper share, a premium of more than 40 percent to its price before the acquisition announcement.

“Because this is an all cash deal with a substantial premium to the pre-deal price the vast majority of shareholders will support this deal at this price,” said Chris DeMuth Jr, portfolio manager at U.S.-based Rangeley Capital.

Still, Cooper shares have lost nearly 12 percent after rising close to the offer price, as roadblocks to the acquisition emerged due to worries over the debt burden of the new owner.

“You’re putting pressure on the company by the amount of debt that they want to use to buy this. And so I think the market will always be skittish in the situation,” DeMuth said. Rangeley Capital owns less than 5 percent in Cooper, he said.

Workers at Cooper’s China joint venture, Cooper Chengshan Tire Co in China’s eastern Shandong province, have been striking against the deal for about three months, while its local partner has filed a lawsuit, seeking to dissolve the business arrangement.

Separately, a U.S. arbitrator ruled Cooper cannot sell two of its factories in the country until a collective bargaining agreement is reached between Apollo and members of the plants’ union.

The two companies have said they hope the deal will get the final all-clear by the end of the year.

Apollo plans to fund the acquisition entirely through debt, most of which will be raised through Cooper, whose market value is currently nearly four times that of the Indian company.

Apollo, whose shares have lost a quarter of their value since the deal was made public, hopes to gain a foothold in the world’s two biggest auto markets – China and the United States – by buying Cooper.

If completed, the deal would be the second-largest U.S. acquisition by an Indian company and one of the top 10 outbound takeovers from Asia’s third-largest economy, according to Thomson Reuters data.

A shareholder approval of the deal also means Apollo can start drawing down loans, which are already committed by banks, according to a source with direct knowledge of the matter.

Apollo declined comment on Monday, while Cooper did not immediately respond to an email seeking comment outside U.S. business hours.

The banks financing the deal include Standard Chartered (STAN.L) and Morgan Stanley (MS.N).

(Reporting by Aradhana Aravindan in MUMBAI and Mridhula Raghavan in BANGALORE; Additional reporting by Sumeet Chatterjee; Editing by Jeremy Laurence)

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