Pep Boys agrees to be bought by Icahn for $1 billion

Pep Boys’ (NYSE:PBY) stock retreated Wednesday, a day after billionaire investor Carl Icahn beat out Japanese tire company Bridgestone in a protracted takeover battle for the auto-service chain.

Icahn Enterprises said it would pay Pep Boys’ breakup fee of $39.5 million to Bridgestone.

Businessman and magnate Carl Icahn stated that Pep Boys’ retail auto parts venture is going to be a good match for Auto Plus, which is a vehicle spare parts company bought in June by Icahn Enterprises.

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The US company, however, left open the possibility for Bridgestone to increase its bid.

Icahn’s offer had threatened to cancel an earlier agreement for Bridgestone to buy the service chain, whose full name is The Pep Boys – Manny, Moe & Jack. Pep Boys has over 800 Supercenters and Service & Tire Centers nationally, including locations in Piscataway, East Brunswick, Edison, and Bridgewater. Back then, he pursued iconic public companies, including Trans World Airlines, and made bids for Phillips Petroleum and department store Marshall Field’s, among others. Bridgestone proposed an all-cash acquisition price of $15 a share, which prompted him raise his offer to $16.50 a share.

Pep Boys said that its board has delivered a notice to Bridgestone to terminate their previous agreement. Pep Boys-Manny Moe and Jack was the topic of 4 analyst reports since September 7, 2015 according to the firm StockzIntelligence Inc.

“This was a terrific opportunity to leverage the financial resources and industry knowledge of Icahn Enterprises to the benefit of Pep Boys’ customers, manufacturer partners and employees and further bolster our US automotive footprint”, Icahn said. That was up $2 per share from Icahn’s earlier bid and $1.50 better than the latest from Bridgestone.

Icahn also holds a dominant 82 percent stake in Federal-Mogul Holdings Corp., which owns about 20 major aftermarket auto parts brands such as Champion Spark Plugs, MOOG steering parts, ANCO wiper blades and Wagner brake parts.