NASHVILLE, Tenn.—Bridgestone Americas Inc. has boosted its offer to buy control of Pep Boys—Manny, Moe & Jack to $17 a share, $1.50 more than its previous offer. The Nashville-based tire maker also disclosed that Pep Boys' board of directors recommended that shareholders accept the offer.
Bridgestone's cash offer—which comes in response to Icahn Enterprises L.P.'s offer of $16.50 per share on Dec. 18—values Pep Boys at $947 million, but still falls short of Icahn's revised proposal disclosed Dec. 23 to offer 10 cents more than any offer Bridgestone might propose, up to a threshold of $18.10.
According to Bridgestone, Pep Boys board of directors “no longer deems the proposal received from Icahn Enterprises L.P. to acquire Pep Boys to be a ‘superior proposal' ” as defined in the original Bridgestone agreement and plan of merger from Oct. 26.
Neither Bridgestone nor Pep Boys addressed the discrepancy between Bridgestone's offer of $17 a share and Icahn Enterprises proposal to counter any Bridgestone offer to $18.10.
Bridgestone said its revised offer price of $17 per share provides approximately $84 million in additional cash consideration to Pep Boys shareholders.
In Icahn's offer of Dec. 22, the New York investment company said it was prepared, through an affiliate, to execute its purchase agreement no later than 8 p.m. on Dec. 24 at a price per share “to be determined in accordance with the … amended Icahn proposal,” provided Pep Boys does not accept an offer from Bridgestone “that would result in Bridgestone being entitled to receive a termination fee.”
Bridgestone's latest tender offer is set to expire at midnight, EST, on Jan. 12. It said about 44,485 Pep Boys shares, or 0.08 percent of all outstanding shares, had been “validly tendered and not withdrawn pursuant to the offer.”
At the same time, Bridgestone said the termination fee payable by Pep Boys to Bridgestone under certain circumstances—including a termination in order to enter into a superior proposal by a third party—increased to $39.5 million from $35 million.
Icahn Enterprises owns 12.1 percent of Pep Boys stock.
“Nearly a century ago, the founders of both our companies created what has become today's automotive aftermarket retail model,” said Stu Crum, president of Bridgestone Retail Operations. “In addition to our long and successful histories in this industry, Pep Boys and Bridgestone share a common vision for the future—to continue to build upon this 100-year foundation to form an even stronger company, one that is renowned for its commitment to being the most trusted provider of automotive service in every neighborhood it serves.”