BRDCY Bridgestone Corp (PK)

   (FROM THE WALL STREET JOURNAL 12/8/15) 
   By Austen Hufford 

Icahn Enterprises on Monday offered to buy Pep Boys - Manny Moe & Jack for $15.50 a share in cash, casting doubt on Bridgestone Corp.'s previously announced purchase of the car-parts and repair company.

Pep Boys reached a deal in October to be acquired by Japanese tire company Bridgestone for $15 a share, or about $835 million. The Icahn offer values the firm at about $863 million.

The Bridgestone deal also includes a potential breakup fee of $35 million.

"We believe our proposal is clearly superior to the $15.00 per share Bridgestone transaction and that our financial wherewithal to close expeditiously is indisputable," Icahn Enterprises executive Keith Cozza said in a letter to Pep Boys.

The proposal isn't subject to due diligence, financing or antitrust concerns, the letter noted.

In a statement, Bridgestone Americas said it made "swift and certain progress" toward completing the acquisition and "quickly received" regulatory and antitrust approval.

It is "now in the advantageous position of completing the tender offer and acquisition in approximately 30 days," Bridgestone added.

Representatives from Pep Boys weren't immediately available for comment.

Earlier Monday, before Icahn's letter, Pep Boys said Carl Icahn's newly unveiled 12.1% stake in the firm had "raised concerns" that the billionaire investor and other third parties could be trying to purchase the company's auto-parts segment.

"Pep Boys shareholders' ability to realize the value presented by the Bridgestone offer may be frustrated," the company wrote.

Pep Boys shares closed up 2.4% on Monday at $16.06.

On Friday, Mr. Icahn disclosed his stake, saying Pep Boys' auto-parts division is an "excellent synergistic acquisition opportunity" for Auto Plus, one of the companies Icahn Enterprises controls.

At 6.6 million shares, Mr. Icahn's Icahn Enterprises would be the second largest shareholder in the company.

Mario Gabelli's Gamco Investors Inc. has a stake of 10.1 million shares in Pep Boys.

Regulatory filings show that Mr. Icahn's firm tentatively offered $11.50 a share in late June and then at least $13.50 in late September, during a monthslong process where multiple parties explored buying Pep Boys.

In July, Bridgestone offered $12 to $15 a share, then raised the low end by $1 a week later.

In September, Bridgestone raised its offer to $15.

During the buying process, Icahn Enterprises and Bridgestone discussed a back-to-back transaction where the winning company would sell assets to the other party. Icahn would get the retail business, and Bridgestone would get the service business.

On Oct. 22, Icahn notified Pep Boys that it wouldn't be moving forward with a proposal; 46 days later, Icahn's letter arrived.

After the bell on Monday, Pep Boys reported its latest quarter of financials, saying its revenue declined 1.8% to $508.1 million, while it swung to a profit of $1.3 million from a year-earlier loss of $2 million.

On a per-share basis, earnings were 3 cents, compared with a loss of 2 cents in the year-earlier period.

(END) Dow Jones Newswires

December 08, 2015 02:47 ET (07:47 GMT)

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