Icahn wins Pep Boys bidding as Bridgestone steps aside

Bridgestone Corp. backed down from a bidding war with billionaire investor Carl Icahn, declining to match his takeover offer of more than $1 billion for the Pep Boys auto-parts retail chain.

Up to Tuesday’s close, Pep Boys shares had risen about 93 percent this year, while Icahn Enterprises shares had fallen about 33.5 percent. “Based on its prior actions, Bridgestone may seek to regain its favored status by merely matching, rather than exceeding the Icahn Enterprises offer, ‘ Efraim Levy, an analyst with S&P Capital IQ, said in a note to clients Tuesday”. That was up $2 per share from Icahn’s earlier bid and $1.50 better than the latest from Bridgestone.

Pep Boys was founded in 1921 and has more than 800 locations, according to its website.

Pep Boys-Manny Moe and Jack (NYSE:PBY) is expected to report earnings of $-0.09 per share when the company next issues its quarterly report.

June 30 – Pep Boys’ board of directors initiated a review of strategic alternatives to enhance shareholder value, including a possible sale, merger or other form of business combination or strategic transaction.

Icahn’s price of $18.50 per share is 23% higher than the original $15-per-share offered by Bridgestone Retail Operations LLC in October.

With the end of the bidding war, shares of Pep Boys fell 55 cents, or 3 per cent, to close Wednesday at $18.39.

The company, based in Philadelphia, said in a statement that Icahn’s proposal proposal was superior and gave Bridgestone until 5 p.m. NY time on December 31 to make another offer or terminate their agreement.

Icahn Enterprises has said that Pep Boys would complement an aftermarket auto parts company that it owns.

Signia Capital Management Llc holds 7.17% of its total portfolio in Pep Boys – Manny Moe & Jack, equating to 177,699 shares. It’s possible Icahn may bump the offer even further considering his latest offer is lower than the $18.94 per share the stock closed at Tuesday.