- Revised proposal would beat any bid up to about $1.01 billion
- Bridgestone has until 7 a.m. Friday, Tokyo time, to respond
Billionaire investor Carl Icahn sweetened his offer to buy Pep Boys with a promise to top any bid from Bridgestone Corp. up to about $1.01 billion, testing the Japanese company’s resolve to expand in the U.S. and create the world’s largest chain of tire and automotive centers.
Icahn’s new offer includes a provision that would automatically beat any bid from Tokyo-based Bridgestone by 10 cents a share, up to a maximum of $18.10 a share, Philadelphia-based Pep Boys said Wednesday in a statement. Pep Boys’ board has determined that Icahn’s offer is superior, giving Bridgestone until 7 a.m. on Friday, Tokyo time, to respond with a new proposal.
Bridgestone will make a decision on its response by the deadline and discuss that with Pep Boys, Fusamaro Iijima, a Tokyo-based spokesman for the company, said by phone.
“We have significant concerns relating to the circumstances surrounding the submission of the revised offer and Pep Boys’ review and consideration of that offer,” Paul Oakley, a spokesman for Bridgestone’s U.S. unit, said in an e-mailed statement earlier. “We are currently evaluating our options in light of recent developments.”
Traders in Pep Boys’ stock had been anticipating an offer higher than Icahn’s most recent bid of $16.50 a share, or about $918.7 million. Shares of the company closed at $16.89 on Tuesday in New York. The stock gained 3 percent to $17.40 on Wednesday. Bridgestone gained as much as 1.5 percent in Tokyo trading.
The company, whose full name is Pep Boys -- Manny, Moe & Jack, has about 7,500 service bays in addition to its retail business. Icahn is looking to add its 800 locations to the Auto Plus chain that he acquired earlier this year.
Analysts have speculated Icahn may be interested only in Pep Boys’ retail operation and would plan to sell the tire and services division to other interested parties such as Bridgestone.