Carl Icahn raised again its offer to acquire Pep Boys. The activist investor is now willing to purchase the automotive aftermarket service and retail company for $18.50 per share in cash, up from his $16.50 per share bid last week.
In a regulatory filing with the Securities and Exchange Commission (SEC), Icahn Enterprises indicated that its new proposal was submitted to the Board of Directors of Pep Boys today, December 28.
The submitted negotiated transaction with Pep Boys “would not be subject to any due diligence financing, or antitrust conditions, according to the firm.
Yost Partners was up 0.8% for the first quarter, while the Yost Focused Long Funds lost 5% net. The firm's benchmark, the MSCI World Index, declined by 5.2%. The funds' returns outperformed their benchmark due to their tilt toward value, high exposures to energy and financials and a bias toward quality. In his first-quarter letter Read More
Icahn Enterprises is one of the largest shareholders of Pep Boys. The firm believes that it is contrary to the best interest of the all the shareholders of the automotive aftermarket service and retail company to agree to any increase of the termination fee payable to Bridgestone Retail Operations, LLC. The firm emphasized that any increase in the termination fee would prevent a truly robust auction.
Additionally, the activist investor’s firm also stated its willingness to bid higher than $18.50 per share to acquire 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.
On October 26, Pep Boys entered into an agreement with Bridgestone to acquire all of its outstanding shares for $15 each in cash. The agreement included a $35 million termination fee.
Icahn Enterprises offer is superior to Bridgestone’s
Earlier this month, the Board of Directors of Pep Boys already concluded that Icahn Enterprises’ bid is superior to Bridgestone’s after consulting with independent legal and financial advisors. The activist investor’s offer was $15.50 per share in cash at the time.
Pep Boys also indicated that its Board of Directors still recommended the deal with Bridgestone and was not making any recommendation on Icahn’s offer at the time. The activist investor raised its offer to $16.50 per share last week, which was considered Pep Boys Board of Directors as “Superior Proposal” as stipulated in the company’s agreement and plan of merger with Bridgestone The Board said it will change its recommendation if Bridgestone does not sweeten its offer.
Bridgestone wants to buy Pep Boys to combine it with its network of tire and automotive centers. On the other hand, Icahn believes Pep Boys as a good acquisition target for Auto Plus, which he owns.