Pep Boys calls Icahn takeover bid "superior"
Auto service retail chain Pep Boys (PBY) Monday said a $16.50 per share takeover bid by activist investor Carl Icahn is a "superior offer" to a rival proposal by Bridgestone Retail Operations.
The announcement sent Pep Boys shares up 6.92% to a $16.85 close, the stock's latest increase in value during the back-and-forth takeover battle waged since October. The stock has risen nearly 39% since Oct. 23, the last trading day before Bridgestone announced its initial deal for the company.
The board of the Pep Boys — Manny, Moe & Jack — said the company received Ichan's offer Friday night and notified Bridgestone Sunday about plans to terminate a tentative agreement over the $15.50 or roughly $863 million sweetened offer previously submitted by the subsidiary of Japan tire maker Bridgestone.
Icahn's latest offer represents a roughly 5% premium to Friday's closing price of Pep Boys shares. The offer values Pep Boys at approximately $893.3 million, based on the company's more than 54 million outstanding shares as of Nov. 27.
However, the takeover fight may not be over yet. Philadelphia-based Pep Boys said Bridgestone, has until 5 p.m. Wednesday to make a new proposal.
"There can be no assurance that a transaction with Icahn will result or that Bridgestone will propose any adjustments to the Bridgestone agreement," Pep Boys said in a statement issued with the announcement. "The Pep Boys Board has not changed its recommendation with respect to the Bridgestone transaction, nor has it made any recommendation with respect to the Icahn proposal."
Bridgestone Retail Operations did not immediately respond to a message seeking comment on the development.
Buying Pep Boys would represent a strategic business move by Icahn because he already controls rival vehicle service company Auto Plus.
Bridgestone bid for Pep Boys as part of a plan to expand its U.S. retail operations. The company operated 2,200 U.S. tire and car service centers under the Firestone Complete Auto Care, Tires Plus, Hibdon Tires Plus and Wheel Works brands. Bridgestone also has more than 5,000 U.S. dealers and distributors.
Contributing: Roger Yu
Follow Paste BN reporter Kevin McCoy on Twitter: @kmccoynyc.
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