Icahn willing to pay nearly $1B for Pep Boys

Investor Carl Icahn is willing to pay nearly $1 billion for Pep Boys — Manny, Moe & Jack (PBY) in his takeover battle with Bridgestone Retail Operations for the automotive service and supply retail giant.

Pep Boys shares closed 11 cents higher at $17.51 in Thursday's abbreviated trading session.

Icahn Enterprises offered to pay 10 cents more per share for Pep Boys than any Bridgestone bid that tops Icahn's standing proposal of $16.50, up to a maximum of $18.10 per share, the chain said late Wednesday.

Based on the 54.1 million Pep Boys shares outstanding as of Nov. 27, the high end of Icahn's offer would value the company at nearly $980 million.

Locking up a deal for Pep Boys would represent a strategic acquisition for Icahn because  he already controls Auto Plus, a rival vehicle service company.

The most recent offer from Bridgestone Retail Operations, a U.S.-based subsidiary of Japan tiremaker Bridgestone was $15.50 per share. Icahn's offer "continues to constitute a superior proposal," as defined in Pep Boys' earlier agreement with Bridgestone, the auto service company said.

Pep Boys gave Bridgestone until  5 p.m. ET Thursday to submit a superior bid.  It said in a regulatory filing that if Bridgestone does not,  it would "terminate" its agreement with the company and execute a formal agreement with Icahn.

Bridgestone did not immediately respond to an email seeking comment. Icahn flagged the development in a  tweet Wednesday that included a link to the Pep Boys filing.

Pep Boys cautioned that "there can be no assurance that a transaction with Icahn will result or that Bridgestone will propose any adjustments to the Bridgestone agreement." As a result, the company has not changed its recommendation on the earlier agreement with Bridgestone, nor made any recommendation on Icahn's latest bid.

Bridgestone bid for Pep Boys as part of a plan to expand its U.S. retail operations. The company operates 2,200 U.S. tire and car service centers under the Firestone Complete Auto Care, Tires Plus, Hibdon Tires Plus and Wheel Works brands. Additionally, Bridgestone has more than 5,000 U.S. dealers and distributors.

Follow Paste BN reporter Kevin McCoy on Twitter: @kmccoynyc.