Icahn returns with higher Pep Boys offer

Monday 21st December 2015 | 0 Comments

 

The bidding war for The Pep Boys – Manny, Moe & Jack has entered a new round, with Icahn Enterprises L.P. offering an extra dollar per share to acquire the US automotive aftermarket retail and service network – a total of around US$56 million more than the offer it made earlier this month. This higher figure has found favour with the Pep Boys Board of Directors – after two days of consultation with legal and financial advisors it determined on 20 December that Icahn’s proposal to acquire Pep Boys for US$16.50 per share in cash constitutes a ‘Superior Proposal’ as defined in Pep Boys’ agreement and plan of merger with Bridgestone Retail Operations, LLC.

Pep Boys informed Bridgestone on 20 December that its board intends to effect a change of recommendation and to terminate the Bridgestone agreement. Delivery of this notice commenced a three business day period that will expire at 5:00pm EST on 23 December 2015. Pep Boys may not change the recommendation nor terminate the Bridgestone agreement during this time, and Bridgestone has the right to make further proposals or offers.

As part of its proposal, Icahn again delivered Pep Boys a merger agreement signed by Icahn that is not subject to due diligence or financing conditions and contains a ‘hell or high water’ anti-trust covenant.

According to the Pep Boys, there can be no assurance that a transaction with Icahn will result or that Bridgestone will propose any adjustments to the Bridgestone agreement. The Pep Boys Board has not changed its recommendation with respect to the Bridgestone transaction, nor has it made any recommendation with respect to the Icahn proposal.

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Category: Company News, International News