PHILADELPHIA—Icahn Enterprises L.P. has raised its offer for control of auto parts retailer and service provider Pep Boys–Manny, Moe & Jack to $16.50 a share, $1 above the Bridgestone Americas offer that Pep Boys endorsed Dec. 11.
Pep Boys' board of directors has now declared Icahn's offer 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 signed by Icahn that is not subject to due diligence or financing conditions and contains a “hell or high water” anti-trust covenant.
Pep Boys notified Bridgestone on Dec. 20 of its board's determination and intention to effect a change of recommendation and to terminate the Bridgestone agreement, a move that includes a three-day period, ending at 5 p.m. EST Dec. 23, Pep Boys said, during which Bridgestone has the right to make counter proposals.
The new offer would put a market value of $919 million on Pep Boys, up from the $863 million valuation resulting from Bridgestone's $15.50 per-share offer.
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.”
Pep Boys operates more than 800 retail locations in 35 states and Puerto Rico, reporting more than $2 billion in revenue last year.