BOSTON (Dec. 23, 2009)—Alliance Tire Group overpaid for the GPX International Tire Corp. assets it acquired recently, according to the head of a failed bidder for the business.
Maurice Taylor Jr., chairman and CEO of Titan Interational Inc., said part of the reason the price was too high was because he drove it up in what he called a “high stakes poker game.”
“I wish them luck with it,” he said. “I think they overspent for what they're getting, which is good for us since they won't have much left over to spend on other activities.”
Alliance's winning bid of $54 million in an auction Dec. 7 at the Boston offices of the U.S. Bankruptcy Court for the District of Massachusetts was $16 million more than the Israeli company's original bid.
Taylor entered the bidding Dec. 2 with a written offer of $44 million.
At the auction, the two sides bid the price up bit by bit, Taylor said, until it reached $49 million—the maximum he was willing to offer for the assets being offered.
For him, the deal boiled down to two basic criteria: acquiring moulds for some sizes and lines Titan doesn't offer and taking a competitor out of the marketplace.
At that point, Judge Joan Feeney called for a final round of sealed bids.
“I originally looked at buying all three businesses,” Taylor said, “but there were some things in the other deals I didn't like so I bid only for the one business.”
Alliance's bid brought it the Galaxy and Primex brands, U.S. and South African physical assets, customer accounts, etc.