Pep Boys board agrees to Icahn takeover

Argus cut shares of Pep Boys-Manny Moe and Jack from a “buy” rating to a “sell” rating and set a $15.00 target price for the company.in a research note on Tuesday, November 24th. Last year, the active investor was looking to work out a deal to stop the closing of the Trump Taj Mahal casino in Atlantic City. The auto parts chain, whose full name is Pep Boys – Manny, Moe, & Jack, sells everything automotive, from tires to air fresheners, in addition to offering fix and maintenance services.

The deal is expected to close in the first quarter of 2016. “I am confident in Pep Boys’ strong future growth prospects as an Icahn Enterprises portfolio company”, added Sider.

Shares in Pep Boys tumbled nearly three percent to 18.38 in late-morning trade. In June, Icahn Enterprises spent about $340 million to buy Auto Plus, the US arm of Canadian parts distributor Uni-Select Inc. The company tire business has been under huge pressure in the recent past forcing the company to pursue new ways of generating cash.

“There are tremendous opportunities for Pep Boys and Auto Plus, a company that shares Pep Boys’ unwavering commitment to best-in-class customer service and solutions”. It competes with larger rivals like AutoZone Inc and Advance Auto Parts Inc.

Mr. Icahn’s firm reiterated Wednesday that it is continuing to have talks with other parties that participated in Pep Boys’ review process about a possible deal for the company’s services segment.

Bridgestone operates more than 2,200 tire and automotive centers in the U.S. Icahn, meanwhile, plans to combine Pep Boys with the Auto Plus chain, which he acquired earlier this year.

“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 USA automotive footprint”, Icahn said in a statement.

Depending on the circumstances, major plays by activist investors like Carl Icahn-and he’s an especially prolific one in the U.S.-can be good or bad for the companies they have in their sights. Pep Boys-Manny Moe and Jack has a 52-week low of $8.00 and a 52-week high of $19.03. Zacks Investment Research upgraded shares of Pep Boys-Manny Moe and Jack from a “hold” rating to a “buy” rating and set a $17.00 price target on the stock in a report on Tuesday, November 24th.

In addition to Auto Plus, Icahn’s holding company also owns an 82 percent stake in auto parts maker Federal-Mogul Holdings Corp.