Pep Boys agreed to a $947 million takeover offer from Bridgestone Corp., shunning a competing bid from billionaire investor Carl Icahn that had promised a higher price.
Pep Boys said Thursday in a statement that its board no longer considers Icahn’s most recent offer — which included a vow to beat any bid up to $1.01 billion — to be a superior proposal.
The agreement shows Pep Boys is willing to accept a lower price to complete the tie-up with Bridgestone that it originally agreed to in October. Bridgestone’s new offer is $17 a share. While that exceeds Icahn’s most recent bid of $16.50 a share, it’s still below the maximum $18.10 a share that he has said he is willing to pay.
The takeover battle for Pep Boys underscores the confidence Icahn and Bridgestone have in the U.S. auto-parts retail industry, which is poised for one of its best years ever as an aging vehicle fleet spurs demand. Both Bridgestone and Icahn are seeking to expand their presence in the tire and automotive- repair industry by adding Pep Boys’ 800 locations across more than 30 states.
Pep Boys shares rose 0.6 percent to $17.51 in New York on Thursday, before Bridgestone’s new proposal was made public, indicating that traders expected a higher offer. The Philadelphia-based company’s shares are up 78 percent this year, largely driven by the bidding war.