Now that the board has a better offer, it could change its recommendation on the deal, or terminate the agreement and make a new one with Icahn, according to Pep Boys’ deal with Bridgestone. He bid .50 this week (which values Pep Boys at about $967 million, including net debt).
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Icahn Enterprises this week offered to pay $15.50 per Pep Boys share, trumping Bridgestone’s plan to $15-per-share offer.
Carl Icahn has a ~12% stake in Pep Boys (PBY), saying the auto parts and maintenance chain’s retail business should be acquired by Auto Plus.
The coming days will show how much Bridgestone is willing to pony up to acquire Pep Boys, a move that would push the tire company deeper into the US and create the world’s largest chain of tire and automotive centers. This beats out the $15.00 per share that was offered by Bridgestone. Bridgestone has a $29 billion market value and about $4 billion of cash.
Rothschild is acting as the exclusive financial adviser to Pep Boys. Shares of the company, whose full name is Pep Boys-Manny, Moe & Jack, rose 0.5 percent to $16.39 in midday trading.
Needless to say, while Bridgestone probably isn’t happy about Icahn driving up the deal price, it’s not a major obstacle to getting the transaction done.
Bridgestone, a Japan-based tires and auto service company, has until Friday to increase its offer or Pep Boys said it will take Icahn’s deal.
And Icahn could still make an offer later for Pep Boys’ retail locations if Bridgestone cuts them loose from the company’s garage, tire and fleet-service units, as some analysts expect.
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This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
