The spare parts and automobile body shop business, Pep Boys is one of the top valued chain of auto body services provided in the greater California area. Pep Boys had signed a deal with Bridgestone which valued the company at a little under 950 million dollars. The company has recently been courted and bid by Icahn. The company seems to be giving Bridgestone a run for their partnership bid with Pep Boys. Icahn seems to be offering 18 dollars per share for the company, which would value Pep Boys at an estimated amount of one billion dollars.
The to and fro
On the other hand, Bridgestone is offering 17 dollars per share which hold the company just shy of a billion dollars. Pep Boys are keen on the former deal, as it obviously would allow the company more funds to grow in its cherished direction. The billion dollar mark is a coveted deal for the Pep Boys. Icahn has gone so far as to say that they would foot the bill by paying extra for Bridgestone’s early termination fee, if there is one in place. This would amount to an additional 50 million dollars, which is calculated at the rate of 18.50 per share.
The deal has gone to and fro thrice already. When the offer was made there was a counter offer by the competitor for the bid. The original offer was then renewed. The details of the bid are still kept secret as it could hurt the negotiations of the deal. However, the deal look like it will be done soon, and Icahn would emerge the winner from this bid, is what it seems. Reports state that Pep Boys have already begun their procedures in order to terminate the deal with Bridgestone, however, some state that there could be another counter offer, this time from Bridgestone.
A likely settlement
The ability to match Icahn’s offer however, seems to be quite doubtful considering Bridgestone has not had the best year. Neither company was available for comment, as they kept most of the negotiations quiet and secret. The Pep Boys deal has been going on since June this year. Icahn already owns stake in Pep Boys. Icahn who currently owns over 12 percent shares in Pep Boys is making the bid in order to unify Pep Boys and its competitors which is also owned by Icahn. The move is a bid to consolidate the business.