It looks like Carl Icahn has won the Pep Boys (NYSE:PBY) bidding war: Bridgestone (OTCPK:BRDCY) says it won't counter Icahn Enterprises' (NASDAQ:IEP) $18.50/share offer for the auto repair shop chain. The offer, issued yesterday, topped a prior $17/share offer from Bridgestone.
Icahn Enterprises' (NASDAQ:IEP) latest offer for Pep Boys (NYSE:PBY) is $1.50/share above the $17/share deal Pep Boys agreed to with Bridgestone (OTCPK:BRDCY) last week. It value auto repair shop owner at a little over $1B.
Pep Boys (NYSE:PBY) says it agrees to a new takeover offer from Bridgestone (OTCPK:BRDCY) that values the company at $947M and no longer deems the proposal received from Icahn Enterprises (NASDAQ:IEP) a "superior proposal."
PBY says Bridgestone will pay $17/share, with the announcement coming just before a 5 p.m. ET deadline to match or exceed Icahn’s $16.50/share offer; Icahn said yesterday he would pay $0.10/share more than any Bridgestone offer up to $18.10 under a "ratchet" structure.
PBY also says the breakup fee in the revised Bridgestone deal has been increased to $39.5M from $35M.
Icahn says of today's offer: "We cannot understand the actions of the directors in that they know we were willing to offer a lot more than $17."
Earlier: Pep Boys breakup is likely scenario, analyst says
The board of directors at Pep Boys (NYSE:PBY) expects a "superior" offer from Bridgestone (OTCPK:BRDCY, OTC:BRDCF) after Carl Icahn and his affiliates came in with a $15.50 per share bid yesterday for the company.
The company is effectively passing on the current Icahn offer while it waits for the competition to play out.
Analysts have already been pushing the consolidation benefits of retail chains within the sector. The M&A move by Bridgestone will also be of interest to tire giants Cooper Tire & Rubber (NYSE:CTB) and Goodyear Tire & Rubber (NASDAQ:GT).
Pep-Boys trades just short of the takeout price of $15, up 22.82% to $14.91.
The all-cash deal works out to $15 per share for Pep Boys (NYSE:PBY), 23% above Friday's close of $12.15. It's also 62% higher than the stock price on May 9, when speculation about a purchase first began.
The deal is expected to close early next year.
PBY +22.65% to $14.89 premarket.
Oct. 26, 2015, 8:52 AM|4 Comments
May 1, 2013, 8:29 PM
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