For the second time in two weeks, Carl Icahn’s Icahn Enterprises has made a bid to acquire Pep Boys. The investment company submitted a proposal to purchase Pep Boys for $16.50 a share on Dec. 18.
Once again, the Pep Boys board of directors has found the Icahn proposal to be a “Superior Proposal” as defined in the company’s merger agreement with Bridgestone Retail Operations. The board notified Bridgestone on Dec. 20 of its determination and intention to effect a change of recommendation and terminate its agreement with the tiremaker.
Pep Boys’ notice to Bridgestone opens a three-day period, expiring 5 p.m. eastern time on Dec. 23, during which Pep Boys can’t change its recommendation or terminate its agreement with Bridgestone. During this time Bridgestone has the right to resubmit proposals for acquiring Pep Boys.
The Japanese tiremaker is standing by nearly identical statements for this latest proposal from Icahn as it did with his first proposal.
“We at Bridgestone Americas are excited about the progress made thus far toward finalizing our company’s acquisition of Pep Boys in early 2016. We are aware that a third party has submitted a competing offer. Under the terms of the merger agreement, Bridgestone has three business days to negotiate with Pep Boys to amend the merger agreement in response to any competing proposal that the Pep Boys board determines is superior,” Bridgestone said in a statement. “We continue to believe that the joining of Bridgestone and Pep Boys, with nearly 200 years of experience in the American automotive aftermarket industry between us, is good for the combined business, offers more diverse career opportunities for employees across a larger company and provides customers with a broad range of the world-class products and services they want, when and where they need them. Any further decisions will be made based on what continues to make business and financial sense for Bridgestone and aligns with our long-term growth strategy.”
Bridgestone entered into an agreement in October to purchase Pep Boys for $15 a share. On Dec. 11, after Icahn’s first bid drove the price of Pep Boys up, Bridgestone agreed to acquire the auto parts company for $15.50 a share.
There is no assurance that a transaction with Icahn will happen and that Bridgestone will propose any adjustments to its previous offer, Pep Boys said in a release. The Pep Boys’ board has not made any recommendations in regard to the new Icahn proposal.
