Pep Boys: Icahn’s buyout is better than Bridgestone’s

Icahn, meanwhile, is believed to want to combine the retail sales side of Pep Boys with Auto Plus, the auto parts network of 2,300 outlets that he controls.

There is no assurance that a transaction with Icahn will happen and that Bridgestone will propose any adjustments to its previous offer, Pep Boys said in a release.

Auto parts retailer Pep Boys has over 7,500 service bays in over 800 locations in 35 states and Puerto Rico.

Pep Boys said Wednesday that it intends to recommend accepting Icahn Enterprises LP’s roughly $863 million takeover bid, and that Bridgestone has until Friday to respond to the rival offer.

Icahn is offering Pep Boys $15.50 a piece for its outstanding shares.

Pep Boys is looking to be bought out by Ichan Enterprises after it presented a “superior” buyout offer than the one Bridgestone gave Pep Boys in October.

“It seems like [Icahn] thinks Bridgestone was trying to get the stores somewhat cheap”, Greenberg added.

Shares in Pep Boys rose 1.5%, or 24 cents, at $16.30 on the New York Stock Exchange on Tuesday.

The only reason for the stock to be higher than $15.50 is because the market expects Bridgestone to top Icahn.

Under the original deal, Bridgestone has until February to get a majority of Pep Boys shareholders to approve its offer or it will lapse.

Both Pep Boys and Bridgestone have yet to issue an official statement about the recent developments. Bridgestone will submit an improved offer as early as this week, since it could be forced to withdraw if it did not make a better counteroffer.

Stay tuned. It will be very interesting to see if Bridgestone decides to do battle with Icahn.