Bridgestone pulls out of bidding war for Pep Boys

However, Icahn Enterprises has no intention to increase its current $18.50 per share offer if Pep Boys agrees to any increase in the termination fee payable to Bridgestone. He offered $18.50 per share in cash which is greater than $1 billion in a sweetened bid. While employees of the company likely would have rather seen Bridgestone win the war, it appears they will now have to deal with Icahn, who is known for his cost-cutting ways.

With Icahn holding a 12% stake in Pep Boys, he stands to gain if Bridgestone ends up spending more to win the company, even if it means Icahn misses out on owning the entire company.

The takeover battle for Pep Boys underscores the confidence Icahn and Bridgestone have in the United States auto-parts retailing industry, which has benefited from an aging vehicle fleet on American roads. Investors had pushed Pep Boys shares higher than Icahn’s price, with shares closing Tuesday up 9% to $18.95.

November 16 – Bridgestone launches its $15-per-share tender offer for Pep Boys; the offer runs through TAJ Acquisition Co., a subsidiary of Bridgestone Retail Operations L.L.C. established to effect the acquisition. Icahn Enterprises, after mulling a purchase of Pep Boys earlier in the year, stepped up its bids to acquire the company this month, forcing Bridgestone to make stronger offers. The transaction is expected to be completed in the first quarter of 2016. Zacks Investment Research upgraded Pep Boys-Manny Moe and Jack from a “hold” rating to a “buy” rating and set a $13.00 target price on the stock in a research report on Monday, September 7th.

As part of its proposal, Icahn Enterprises delivered to the Company a merger agreement signed by Icahn Enterprises that is not subject to due diligence or financing conditions.