Billionaire activist investor Carl Icahn Monday raised his takeover bid for Pep Boys – Manny, Moe & Jack, topping Bridgestone’s Christmas Eve deal for the auto services chain.
Marking the latest twist in the back-and-forth corporate duel for Pep Boys (PBY), Icahn Enterprises said it offered $ 18.50 per share, which values the Philadelphia-based company at slightly more than the $ 1 billion Icahn had formally signaled last week he was willing to pay.
The offer for now bests the $ 17-a-share offer that Pep Boys agreed to with Bridgestone Retail Operations, a U.S.-based subsidiary of Japan tire maker Bridgestone.
Pep Boys shares rose 6.2% to $ 18.48 in after-hours trading. The stock closed down 0.6% at $ 17.41 in regular trading Monday.
Bridgestone did not immediately respond to an email seeking comment on Icahn’s new bid. Pep Boys said the company had no immediate comment.
Icahn’s company said in a Securities and Exchange Commission filing that the new offer represents a negotiated transaction that would not be subject to any due diligence, financing or antitrust conditions.
The filing also criticized the provision in the Thursday agreement that would raise the termination fee payable by Pep Boys to Bridgestone from $ 35 million to $ 39.5 million for certain circumstances, including including a termination to enter a superior proposal by a third party. The provision “would prevent a truly robust auction,” Icahn Enterprises contended.
The Icahn-controlled financial company also said in the filing it could be willing to raise the new $ 18.50 a share bid for Pep Boys, but won’t do so if the auto services chain agrees to any increase of Bridgestone’s termination fee.
Icahn’s battle to win Pep Boys represents a strategic acquisition because he already controls Auto Plus, a rival vehicle service company.
Bridgestone’s bid for Pep Boys represents part of a plan to expand its U.S. retail operations. The company operates 2,200 U.S. tire and car service centers under the Firestone Complete Auto Care, Tires Plus, Hibdon Tires Plus and Wheel Works brands. Additionally, Bridgestone has more than 5,000 U.S. dealers and distributors.
Follow USA TODAY reporter Kevin McCoy on Twitter: @kmccoynyc.
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