Icahn Buys Into Pep Boys, Seeks Retail Sale to His Auto Plus

Billionaire activist investor Carl Icahn.

Billionaire activist investor Carl Icahn.

Photographer: Victor J. Blue/Bloomberg
  • Billionaire's representatives have held talks with Pep Boys
  • Auto Plus is IEP-held company consolidating parts suppliers

Billionaire activist investor Carl Icahn disclosed a new 12.1 percent stake in The Pep Boys - Manny Moe & Jack and said the auto parts and maintenance chain’s retail business should be acquired by Auto Plus -- a competitor he controls.

Icahn believes Pep Boys’ “retail automotive parts segment presents an excellent synergistic acquisition opportunity for Auto Plus, a leading automotive aftermarket company wholly owned by” Icahn Enterprises LP, according to a 13D regulatory filing Friday.

Representatives for Icahn have “and intend to continue to have” talks with the company and others who “participated in the issuer’s strategic alternatives review process regarding potential transactions involving the issuer’s retail segment,” according to the filing.

The move may put Icahn into competition with a unit of Bridgestone Corp., which agreed in October to buy the Pep Boys retail chain for about $835 million to combine with its network of tire and automotive centers across the U.S. The tender offer is set to expire on Jan. 4.

Auto Plus is an aftermarket parts supplier that Icahn acquired this year from Canada’s Uni-Select Inc. for about $340 million, and which he is using to drive consolidation in the industry. The company aims to be one of the largest automotive aftermarket companies in the U.S. in the next five years, according to its website.

Icahn Enterprises is a publicly traded master-limited partnership that holds stakes in the billionaire activist’s investments in industries including autos, energy, metals, rail cars, casinos, food packaging, real estate and home fashion. Icahn, 79, is worth about $21 billion, according to the Bloomberg Billionaires Index, and primarily invests his own fortune, rather than relying on money from outsiders.

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