Icahn is looking to combine Pep Boys' retail business with Auto Plus, an aftermarket parts supplier he acquired this year.
CHICAGO (Bloomberg) -- Pep Boys gave Bridgestone Corp. three days to top Carl Icahn’s $15.50-per-share, $863 million takeover offer, saying its board had determined that the billionaire investor’s bid is superior to their earlier agreement.
Bridgestone was notified of the board’s plan to change its recommendation and terminate their agreement on Tuesday, the Philadelphia-based company said Wednesday in a statement. Bridgestone now has until 5 p.m. New York time on Friday to make a new offer, Pep Boys said.
The coming days will show how much Bridgestone is willing to pony up to acquire Pep Boys, a move that would push the tire company deeper into the U.S. and create the world’s largest chain of tire and automotive centers. Bridgestone had agreed to buy Pep Boys for about $835 million, or $15 a share, in October.
Traders are betting that the Pep Boys ultimately will sell for a price higher than Icahn’s bid. Shares of the company, whose full name is Pep Boys-Manny, Moe & Jack, rose another five cents to close at $16.34 today.
Icahn is looking to combine Pep Boys’ retail business with Auto Plus, an aftermarket parts supplier he 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.
The deal also could have implications for Icahn-controlled Federal-Mogul Holdings Corp., a Michigan-based auto supplier that owns about 20 major aftermarket auto parts brands such as Champion Spark Plugs, MOOG steering parts, ANCO wiper blades and Wagner brake parts.
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.