On Monday, Pep Boys said Icahn had sweetened his offer for the Philadelphia company to $18.50 a share in cash, or about $1 billion.
In the addition to Pep Boys’ agreement to accept Icahn’s offer, it notified Bridgestone of the intention to terminate its previous plan as of December 23. The transaction is expected to be completed in the first quarter of 2016. Pep Boys had originally made a deal with Bridgestone, but Icahn made an initial bid earlier this month.
Market observers suggested that Mr. Icahn’s determination to acquire Pep Boys demonstrated his confidence or bullishness in the auto parts industry. Pep Boys-Manny Moe and Jack was the topic of 4 analyst reports since September 7, 2015, according to the firm StockzIntelligence Inc.
The offer submitted on Monday is the third offer to purchase the company, and the termination of the agreement with Bridgestone has caused Bridgestone’s stock to rise 0.58% on the day. Bridgestone was not immediately available for comment. Because Pep Boys had already agreed to a deal with Bridgestone Corp., Icahn Enterprises will pay a $39.5 million break-up fee.
Icahn’s latest offer topped tire company Bridgestone’s recently raised proposal of $17 a share, which had, in turn, topped an earlier bid from Icahn.
The company operates a chain of 800 service and parts sales outlets across the United States, and buying it would elevate Bridgestone’s U.S. market position for its tires. “We have been actively looking for an excellent synergistic acquisition opportunity like Pep Boys, which has enormous growth potential, strong brand recognition, and well-known, best-in-class customer service”, he said.