Icahn sweetens offer for Pep Boys

Bridgestone’s shares rose the most in two weeks in Tokyo after the tire maker said late Tuesday it won’t counter the $18.50-a-share bid made by Icahn’s investment firm on Monday.

Bridgestone has increased its offer to buy control of Pep Boys from $15.50 to $17.00 per share in cash which will provide “approximately $84 million in additional cash consideration to Pep Boys shareholders”.

Shares of the auto retailer, whose full name is Pep Boys-Manny, Moe & Jack, fell 2.9 percent to $18.40 as of 9:33 a.m. on Wednesday.

The offer from Icahn Enterprises is not subject to any due diligence, financing or antitrust conditions. The automotive retailer agreed to a sweetened, $17-a-share takeover offer from Bridgestone last week, following an earlier bid from Icahn.

Icahn Enterprises LP, Icahn’s company, owns another auto-parts business, Auto Plus, so the addition of Pep Boys could strengthen that franchise. Investors had pushed Pep Boys shares higher than Icahn’s price, with shares closing Tuesday up 9% to $18.95.

Market observers suggested that Mr. Icahn’s determination to acquire Pep Boys demonstrated his confidence or bullishness in the auto parts industry.

Pep Boys has 801 outlets in 35 states, selling auto parts and offering vehicle maintenance: 567 Supercenter store/garage combinations and 234 service and tire garages, operating in parts of the country under the Discount Tire, Big 10, and Florida Tire brands. The company’s quarterly revenue was down 1.8% compared to the same quarter a year ago.

The deal is expected to close in the first quarter of next year.

Pep Boys-Manny Moe and Jack (NYSE:PBY) last released its quarterly earnings data on Monday, December 7th.

Pep Boys-Manny Moe and Jack (NYSE:PBY) hit a new 52-week high on Tuesday, Market Beat.com reports.

Pep Boys sales are lower now than they were in 2006, and profitability has declined in recent years.

October 26 – Bridgestone offers to buy Pep Boys for $15 a share, a price that’s a 23-percent premium over Pep Boys’ closing price of $12.15 on October 23. Customers can find the nearest location by calling 1-800-PEP BOYS (1-800-737-2697) or by visiting www.pepboys.com. Copies of Pep Boys’ filings with the SEC may be obtained at the “Investors” section of Pep Boys’ website at www.pepboys.com or on the SEC’s website at www.sec.gov.