Pep Boys, the auto parts chain, said its board has determined that the most recent offer by Carl Icahn, the activist investors, for buying out the company was superior to that of a deal it accepted from China-based Bridgestone. The auto parts U.S. retailer has moved to end its agreement with Bridgestone.
The latest bid by Icahn is at a per share price of $18.50, came on Monday and values the Pep Boys chain at approximately $1 billion. The last offer from Bridgestone was for $17 a share that valued Pep Boys at just over $947 million.
The auto parts chain said its board delivered a letter to the Bridgestone board terminating the agreement that it had previously entered into.
Icahn Enterprises announced it could bid up to $18.50 a share for the company unless Pep Boys increased the termination fee of Bridgestone of $39.4 million.
Icahn Enterprises’ offer is not subject to antitrust conditions, due diligence or financing.
Bridgestone and Icahn have been amidst a bidding war to acquire Pep Boys. The offer on Monday was the third bid by Icahn for the business including two this month that increased the price of the deal.
Neither of the two – Bridgestone or Icahn Enterprises were available to make a comment regarding the latest offer by Icahn.
The retailer of auto parts had been up for sale since early June, when it announced it had been considering selling itself.
Bridgestone first said back on October 26 that it was going to acquire Pep Boys as a way to boost its network of retail outlets by over one third across the U.S.
Icahn reported a stake of 12.12% in the auto parts chain earlier this month and said the retail business of the company would be an excellent fit for Auto Plus, which is a competitor that he already owns.
Pep Boys share price jumped in trading after hours on Monday to $18.50 from its close on Monday of $17.40.
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