Bridgestone Sweetens Offer For Pep Boys, Trumps Icahn Bid

(RTTNews) - Japanese tire maker Bridgestone Corp. on Thursday sweetened its takeover bid for auto parts retailer Pep Boys - Manny, Moe & Jack (PBY) to about $947 million, trumping a rival bid from Carl Icahn's Icahn Enterprises LP. (IEP).

Following receipt of the revised offer, Pep Boys said its board continues to unanimously recommend that its shareholders accept Bridgestone's offer and tender their shares to that offer. In addition, the company's board no longer deems the offer received from Icahn Enterprises L.P. to acquire Pep Boys to be a "superior proposal".

Bridgestone Americas, Inc. and Pep Boys said Thursday that Pep Boys and Bridgestone's subsidiary, Bridgestone Retail Operations, LLC or BSRO, have amended their agreement and plan of merger dated October 26, 2015.

BSRO has raised its offer price to acquire all the outstanding shares of Pep Boys from $15.50 per share to $17.00 per share in cash, or about $947 million. The company noted that the revised offer price provides about $84 million in additional cash consideration to Pep Boys' shareholders.

Bridgestone's tender offer is being extended and will now expire on Tuesday, January 12, 2016, unless further extended. As of Thursday, December 24, 2015, about 44,485 shares of Pep Boys have been validly tendered and not withdrawn pursuant to the offer.

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, has been increased to $39.5 million from $35 million.

On Wednesday, Pep Boys had said its board determined a revised proposal from Icahn Enterprises to be superior to Bridgestone's offer. The revised proposal by Icahn improved the purchase price from $16.50 per share to the greater of $16.50 per share and "a price equal to $0.10 more per share than any Bridgestone offer, up to a maximum of $18.10 per share".

PBY closed Thursday's trading at $17.51, up $0.11 or 0.63 percent on a volume of 465,369 shares.