Pep Boys agrees to be bought by Icahn for $1 billion
NEW YORK – Pep Boys will be acquired by Carl Icahn for $1 billion, ending a weeks-long bidding war with the Japanese tire company Bridgestone.
The deal is expected to close in the first quarter of next year.
Icahn Enterprises offered $18.50 in cash for each share of Pep Boys Tuesday, $1.50 more per share than the most recent offer from Bridgestone. With the contest becoming too rich, Bridgestone bowed out a few hours later.
Because Pep Boys already agreed to a deal with Bridgestone Corp., Icahn Enterprises will pay a $39.5 million break-up fee.
Pep Boys – Manny, Moe & Jack, based in Philadelphia – operates more than 800 locations around the country that sell auto parts, fix vehicles and offer other services. The company’s tire business was under pressure and it looked for new ways to generate cash.
Icahn said in a statement Pep Boys has “enormous growth potential.” The activist investor said he waslooking for a company to pair with Auto Plus, an auto parts distributor Icahn Enterprises bought earlier this year.