Icahn Pumps Up Pep Boys

8 Dec 2015 | Author: | No comments yet »

Carl Icahn Makes Counterbid for Pep Boys.

Icahn Enterprises on Monday offered to buy Pep Boys – Manny Moe & Jack for $15.50 a share in cash, casting doubt on Bridgestone Corp.’s previously announced purchase of the car-parts and repair company. That’s Carl as in Carl Icahn, the billionaire investor, who has jumped in to try to outbid Japanese tire maker Bridgestone to buy auto parts chain Pep Boys. “We believe our proposal is clearly superior to the $15 per share Bridgestone transaction and that our financial wherewithal to close expeditiously is indisputable,” he wrote.

That takeover had lifted the spirits of Pep Boys’s shareholders, many of whom had become frustrated with roughly flat revenue in the last four years. Yet even the Bridgestone offer, which represented a premium of nearly 24 percent to the company’s previous closing price, apparently has failed to win over major investors, including Mr. In the first half, which ended in August, the company earned $16 million a share, or $0.31, up from a little over $1 million in the same time the year before. In a letter to Pep Boys, an executive at his investment vehicle argued that Monday’s offer was “clearly superior” and was not contingent on due diligence or financing.

In a prepared statement, Pep Boys dismissed Icahn’s bid, saying he was just trying to drive up the price Bridgestone would be willing to pay for it, allowing him to pocket a quick profit. Icahn’s latest disclosure, Pep Boys said that he had previously refused to raise his own takeover bid for the company above $13.50 a share, and until that point had not presented any alternative offer.

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