Carl Icahn Raises Offer for Pep Boys to $18.50 Per Share

As the bidding war between Icahn and Bridgestone comes to an end, Icahn’s offer of $18.50 per share of Pep Boys’ stock seems to be the top offer. Over the last few weeks, Bridgestone matched Icahn’s offer at $15.50, was outbid again and finally offered $17 per share.

Icahn in a written statement said he would link the company with Auto Plus, the rival auto parts and services chain with 270 US locations that his company acquired in June.

Icahn Enterprises, which expects to close the Pep Boys acquisition in the first quarter of 2016, will pay $39.5 million termination fee to Bridgestone.

On Dec. 30 Pep Boys and Icahn Enterprises LP (of which Icahn is chairman, ) made the deal official.

Bridgestone’s increased cash offer was in response to Icahn Enterprises L.P.’s increase in its bid for Pep Boys which was as high as $18.10 a share.

Pep Boys shares fell more than 3% on the news, suggesting investors were hopeful another offer would emerge.

Bridgestone would have had to spend additional funds on a scale of 20 billion yen ($164 million) to match Icahn’s winning offer.

Also on December 28, 2015, the Company delivered notice to Bridgestone of the Pep Boys Board’s determination and intention to effect a change of recommendation and to terminate the Bridgestone agreement. Analysts have speculated that Icahn may only be interested in Pep Boys’ retail operation and would plan to sell the tire and services division to other interested parties such as Bridgestone. BB&T Corp. lowered shares of Pep Boys-Manny Moe and Jack from a “hold” rating to an “underweight” rating and set a $15.00 price target on the stock.in a report on Monday, October 26th. That’s $1.50 per share more than the latest offer from Nashville-based Bridgestone. The mean of all analyst targets is $12.50 which is -34.04% below today’s ($18.95) stock price.