The back and forth for control of Pep Boys continues.
Icahn Enterprises LP has raised its offer for control of the auto parts retailer and service provider, becoming the “superior proposal” over Bridgestone America’s bid.
Icahn offered $16.50 a share, a full dollar above the Bridgestone Americas offer that Pep Boys endorsed Dec. 11.
Pep Boys’ board of directors has now declared Icahn’s offer a “superior proposal,” as defined in the company’s agreement and plan of merger with Bridgestone Retail Operations L.L.C.
As part of its proposal, Icahn delivered to Pep Boys a merger agreement signed by Icahn that is not subject to due diligence or financing conditions and contains a “hell or high water” anti-trust covenant.
Pep Boys notified Bridgestone on Dec. 20 of its board’s determination and intention to effect a change of recommendation and to terminate the Bridgestone agreement. Bridgestone has three days to make a counter proposal.
Icahn Enterprises delivered its offer to Pep Boys in the evening of Dec. 18 with the caveat that it was “not an open-ended proposal.”
The new offer would put a market value of $919 million on Pep Boys, up from the $863 million valuation resulting from Bridgestone’s $15.50 per-share offer.
Pep Boys operates more than 800 retail locations in 35 states and Puerto Rico, reporting more than $2 billion in revenue last year.