PHILADELPHIA—Pep Boys – Manny, Moe & Jack is now favoring Icahn Enterprises L.P.'s $15.50 per-share takeover offer over the $15 per-share offer from Bridgestone Americas, but Bridgestone has until 5 p.m. on Dec. 11 to make a counteroffer.
This position, disclosed Dec. 9, came after the company's board of directors determined that the Icahn offer constitutes a superior proposal, as defined in the company's agreement and plan of merger with Bridgestone Retail Operations L.L.C.
As part of its proposal, Icahn delivered to Pep Boys a merger agreement that is not subject to due diligence or financing conditions and contains a “hell or high water” antitrust covenant, Pep Boys said.
The Pep Boys' board's position trumps its position statement from a day earlier, when it said it was evaluating Icahn's offer but that it had “not changed its recommendation with respect to the Bridgestone transaction, nor is it making any recommendation with respect to the Icahn proposal.”
In connection with classifying the Icahn offer as a superior proposal, Pep Boys' board notified Bridgestone of its determination and intention to effect a change of recommendation and to terminate the Bridgestone agreement.
Such notice commenced a three-business day period that will expire at 5 p.m. Eastern Standard Time on Dec. 11, during which Pep Boys “may not change the recommendation nor terminate the Bridgestone agreement,” and during which Bridgestone has the right to make counter-proposals.
In response, Bridgestone Americas acknowledged the existence of Icahn's offer and said, “Any further decisions [regarding Pep Boys] will be made based on what continues to make business and financial sense for Bridgestone and aligns with our long-term growth strategy.
“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.”
In its statement Pep Boys said, “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.