Pep Boys tells Bridgestone that buyout from Icahn Enterprises is a better offer

NEW YORK, N.Y. – Pep Boys said Wednesday that it told Bridgestone that it may ditch an already agreed upon $835 million buyout offer and go with a competing offer from Carl Icahn’s investment firm that is worth $2 million more.

Icahn Enterprises is offering $15.50 for each Pep Boys share, compared with Bridgestone’s offer of $15 per share. The buyout from Icahn Enterprises is worth about $837.4 million. Icahn, an activist investor, has an 11.2 per cent stake in Pep Boys, according to FactSet.

Bridgestone, a Japan-based tires and auto service company, has until Friday to increase its offer or Pep Boys said it will take Icahn’s deal. Pep Boys said it notified Bridgestone of its decision.

Bridgestone confirmed in a statement Wednesday that it received the notice and said any further decisions will be made based on what makes financial sense for the company. Bridgestone said it still believes its buyout of Pep Boys “is good for the combined business.” The company declined to comment further.

Pep Boys – Manny, Moe & Jack, based in Philadelphia, has about 800 locations around the country that sell auto parts and repairs vehicles.

Shares of Pep Boys were down 2 cents at $16.28 in midday trading Wednesday. Their shares have risen 66 per cent so far this year.