Carl Icahn Raises Offer for Pep Boys

20 Jan 2016 | Author: | No comments yet »

Carl Icahn Raises Offer for Pep Boys.

Shares of Pep Boys – Manny Moe & Jack (PBY) are jumping after billionaire hedge fund titan Carl Icahn upped the ante in a bidding war for the auto-parts retailer.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.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.

Icahn has made a new, higher offer for Pep Boys, causing the car-parts and servicing chain to terminate its agreement to be acquired by Bridgestone, the tire company. The announcement sent Pep Boys shares up 6.3% to $16.75 in morning trading, their latest increase in value during the back-and-forth takeover battle waged since October. Pep Boys said in a filing on Monday that it received Icahn’s latest entreaty on Dec. 18 and its board subsequently ruled that Icahn’s bid is superior. In a statement, Bridgestone acknowledged the competing offer, but said it continues to believe its deal with Pep Boys is good for the combined businesses.

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. The billionaire investor is looking to add Pep Boys’ 800 locations to the Auto Plus chain that he acquired earlier this year, while Tokyo-based Bridgestone is seeking to push deeper into the U.S. and create the world’s largest chain of tire and automotive centers. Icahn, who holds about an 11 percent stake in Pep Boys, was unhappy with Bridgestone’s original October offer to acquire Pep Boys in an all-cash transaction for $15.00 a share. 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.

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