Icahn Takes Lead in Pep Boys Battle With $918.7 Million Bidby
Bridgestone has until Wednesday to top investor's proposal
Bidding war driven by boom times for auto-parts retailers
Carl Icahn has retaken the lead in the bidding war for Pep Boys.
The auto-parts retailer and mechanic-shop chain said in a statement Monday that its board has decided that a $918.7 million offer that Icahn made Friday evening was superior to an earlier bid from Bridgestone Corp. That determination means Bridgestone has until 5 p.m. New York time on Wednesday to top Icahn’s proposal.
The battle for Pep Boys shows that Icahn and Bridgestone are confident that auto-parts retailers’ recent strength, driven by a large and aging U.S. vehicle fleet, will continue. Icahn’s current bid for Pep Boys is 10 percent higher than the $835 million offer from Bridgestone that Pep Boys agreed to in October. The billionaire investor is looking to add Pep Boys’ 800 locations to the Auto Plus chain that he acquired earlier this year, while Tokyo-based Bridgestone is seeking to push deeper into the U.S. and create the world’s largest chain of tire and automotive centers.
Bridgestone will negotiate with Pep Boys and consider all possibilities, including modifying its bid, said Tokyo-based spokesman Fusamaro Iijima.
Traders had been betting that Bridgestone’s most recent bid of about $863 million, or $15.50 a share, would be topped. Philadelphia-based Pep Boys’ shares closed at $15.76 on Friday. They rose 6.9 percent to close at $16.85 on Monday, indicating investors expect an even higher bid may be in the offing.
The company, whose full name is Pep Boys -- Manny, Moe & Jack, has about 7,500 service bays in addition to its retail business. Analysts have speculated Icahn still may be interested only in Pep Boys’ retail operation and would plan to sell the tire and services division to other interested parties like Bridgestone.