Bridgestone nears deadline on Pep Boys
Bridgestone Corp. has until Friday to beat Carl Icahn's offer of $15.50 a share for Philadelphia-based auto parts and repair chain Pep Boys - Manny Moe & Jack, or Pep Boys will sell to Icahn, the company said Wednesday in Securities and Exchange Commission filings.
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Bridgestone Corp. has until Friday to beat Carl Icahn's offer of $15.50 a share for Philadelphia-based auto parts and repair chain Pep Boys - Manny Moe & Jack, or Pep Boys will sell to Icahn, the company said Wednesday in Securities and Exchange Commission filings.
In October, Bridgestone agreed to pay $15 a share for the chain - more than $800 million, or less than 10 percent above the estimated value of Pep Boys' real estate - pending a financial review. Japan-based Bridgestone hopes to merge Pep Boys' 800 garages and tire and fleet-service business into its own 2,200 Firestone stores.
But Icahn, who previously bid $13.50 a share for Pep Boys, has since bought up one-eighth of Pep Boys' shares and now says he's willing to pay an extra $2 a share - no questions asked, cash on demand - to buy the chain.
Icahn says he hopes to combine Pep Boys with his smaller Auto Plus (formerly Uni-Select) store and service chain.
Icahn and Pep Boys told the SEC they signed a confidentiality agreement Tuesday that, under terms of the Bridgestone deal, gives Bridgestone three days to beat Icahn's offer. Otherwise, Pep Boys plans to cancel the Bridgestone deal and make another on Icahn's terms.
Bridgestone's option runs out at 5 p.m. Eastern time Friday.
It is also possible that Icahn and Bridgestone could strike a deal that would give Icahn Pep Boys' retail-store network, while combining the garages into Firestone.
A sale would affect the future of Pep Boys' headquarters on West Allegheny Avenue, where 500 management and support staff work.
Bridgestone has said it expects some work would be consolidated at Firestone's Nashville headquarters.
Icahn's auto-parts company, which he bought this year, is based in Georgia.
Pep Boys, founded in 1921, has sought buyers several times over the last 10 years.
The company has lagged newer retailers such as AutoZone in reaching urban and immigrant do-it-yourselfers. Its retail stores are just 20 percent of the $2 billion yearly business, Pep Boys told investors in October.
The company is only marginally profitable.
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