Icahn trumps Bridgestone with $837 million offer for Pep Boys

(Reuters) - Carl Icahn offered to buy Pep Boys–Manny, Moe & Jack PBY.N in a deal valuing the U.S. auto parts retailer at about $837 million, trumping Japanese tire maker Bridgestone Corp's 5108.T offer of $810 million.

Billionaire activist-investor Carl Icahn gives an interview on FOX Business Network's Neil Cavuto show in New York February 11, 2014. REUTERS/Brendan McDermid

Icahn Enterprises LP IEP.O offered $15.50 per Pep Boys share in cash, a 1.2 percent discount to Friday's close, but higher than Bridgestone's offer of $15 per share, also in cash.

Icahn had reported a 12.12 percent stake in Pep Boys on Friday and said the company’s retail automotive parts business would be a perfect fit for Auto Plus, a competitor he controls.

Bridgestone had said on Oct. 26 that it would buy Pep Boys, a deal that would boost its retail network by more than a third in the United States.

"We believe our proposal is clearly superior to the $15.00 per share Bridgestone transaction," Icahn Enterprises' Chief Executive Keith Cozza said in a letter to Pep Boys' management on Monday. (

Bridgestone and Pep Boys were not immediately available for comment.

Pep Boys shares were up about 1.8 percent at $15.97 in afternoon trading, indicating shareholders were expecting a higher offer.

The stock had risen about 29 percent since the Bridgestone deal was announced.

Unlike rivals AutoZone Inc AZO.N and Advance Auto Parts Inc AAP.N, Pep Boys has not benefited from a resurgent U.S. auto industry due to high costs eating into its earnings and falling sales at its do-it-yourself business.

Pep Boys has been on the block since June, when it said it was considering selling itself as part of a strategic review.

Both the deal values are based on Pep Boys’ nearly 54 mln shares outstanding as of Aug. 29.

Reporting by Sudarshan Varadhan in Bengaluru; Editing by Savio D’Souza