Carl Icahn raises offer for Pep Boys, tops Bridgestone’s offer

20 Jan 2016 | Author: | No comments yet »

CompaniesCarl Icahn steps up fight for Pep Boys.

NEW YORK, N.Y. – Pep Boys is calling a revised offer from billionaire Carl Icahn a superior bid, just days after the auto parts seller accepted a sweetened deal from tire company Bridgestone. Pep Boys also said Monday that its Board of Directors had deemed the offer by Icahn a “superior proposal” and gave Bridgestone until Wednesday at 5 p.m.The activist investor, who is best known for rattling the cages of companies’ boards, has increased his offer for Pep Boys, a US chain of car mechanics.

As part of its proposal, Icahn delivered to the Company a merger agreement signed by Icahn that is not subject to due diligence or financing conditions and contains a “hell or high water” anti-trust covenant. Also on December 20, 2015, the Company delivered notice to Bridgestone of the Pep Boys Board’s determination and intention to effect a change of recommendation and to terminate the Bridgestone agreement.

In December, Icahn Enterprises, which was involved in the bidding process earlier this year, unexpectedly made a new offer after the Bridgestone deal was announced of $15.50 per share, or about $863 million. Although acknowledging that Mr Icahn’s proposal is superior, Pep Boys said its board is yet to change its recommendation of Bridgestone’s offer but will do so by the end of Wednesday if the Japanese company hasn’t sweetened its proposal. With over 7,500 service bays in over 800 locations in 35 states and Puerto Rico, Pep Boys offers name-brand tires; automotive maintenance and repair; parts and expert advice for the Do-It-Yourselfer; commercial auto parts delivery; and fleet maintenance and repair. Analysts have speculated Icahn still may be interested only in Pep Boys’ retail operation and would plan to sell the tire and services division to other interested parties like Bridgestone.

Bridgestone is trying to buy Pep Boys to combine it with its network of tire and automotive centers, while Icahn views Pep Boys as a good acquisition target for rival Auto Plus, which he owns. Words such as “believe,” ‘intend,” “demonstrate,” “expect,” “estimate,” “anticipate,” “should” and “likely” and similar expressions identify forward-looking statements.

Such forward-looking statements are based on current expectations that involve a number of known and unknown risks, uncertainties and other factors which may cause actual events to be materially different from those expressed or implied by such forward-looking statements. These risks include uncertainties associated with the Bridgestone tender offer and the merger, including uncertainties as to the timing of the tender offer and merger, uncertainties as to how many of Pep Boys’ shareholders will tender their shares in the offer, the risk that competing offers will be made, and the possibility that various closing conditions for the transaction may not be satisfied or waived. Securities and Exchange Commission (“SEC”), including its Annual Report on Form 10-K for the fiscal year ended January 31, 2015, and subsequent reports filed by Pep Boys with the SEC. In addition, Schedule TO (including the Offer to Purchase, a related Letter of Transmittal and other offer materials) and the related Solicitation/Recommendation statement on Schedule 14D-9 may be obtained free of charge from D.F.

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