Icahn Enterprises offered $18.50 in cash for each share of Pep Boys on Tuesday, $1.50 more per share than the most recent offer from Bridgestone.
Pep Boys said on Monday Icahn’s latest offer was indeed superior to the deal it accepted from Bridgestone, and moved to terminate its agreement with the Japanese company.
However, after Bridgestone said it would not top Icahn’s $18.50 a share bid, the stock slumped more than 3 percent to $18.32 in after-hours trading Tuesday.
Businessman and magnate Carl Icahn stated that Pep Boys’ retail auto parts venture is going to be a good match for Auto Plus, which is a vehicle spare parts company bought in June by Icahn Enterprises. It said it had informed Tokyo-based Bridgestone Corp. of Icahn’s boosted offer.
In a statement, Pep Boys CEO Scott Sider said the agreement delivers outstanding value to Pep Boys’ shareholders and allows Pep Boys to benefit from “the significant expertise and resources of Icahn Enterprises”.
As the takeover bid from Bridgestone Retail Operations, L.L.C., a wholly owned subsidiary of Bridgestone, turned into a fight for control with Icahn, Pep Boys’ stock has been rising steadily over the last two months. While employees of the company likely would have rather seen Bridgestone win the war, it appears they will now have to deal with Icahn, who is known for his cost-cutting ways. “Icahn had hinted that a bid was coming, indicating in a filing with the Securities and Exchange Commission that Pep Boys” auto parts segments would fit well with Icahn Enterprises-owned auto parts business Auto Plus. Zacks Investment Research upgraded shares of Pep Boys-Manny Moe and Jack from a “hold” rating to a “buy” rating and set a $17.00 price target on the stock in a report on Wednesday, November 18th. Bridgestone’s offer was valued at $947 million, or $17 per share.
Pep Boys-Manny Moe and Jack (NYSE:PBY) last released its quarterly earnings data on Monday, December 7th.
