Bridgestone receives payout as Pep Boys deal dies

The merger agreement signed between Bridgestone Retail Operations and The Pep Boys – Manny, Moe & Jack in October 2015 has been terminated, and in its place the US automotive service and retail chain has signed a definitive agreement under which Icahn Enterprises will acquire Pep Boys for US$18.50 per share in cash. Simultaneous with the demise of the Bridgestone agreement, Icahn Enterprises, on behalf of Pep Boys, paid Bridgestone a $39.5 million termination fee.

Icahn Enterprises will pay approximately $1.031 billion for the 800+ outlet Pep Boys network. The transaction, which is not conditioned on financing, is expected to close in the first quarter of 2016.

“This was a terrific opportunity to leverage the financial resources and industry knowledge of Icahn Enterprises to the benefit of Pep Boys’ customers, manufacturer partners and employees and further bolster our US automotive footprint,” said Carl C. Icahn, chairman of Icahn Enterprises. “Since our acquisition of Auto Plus, our wholly-owned automotive aftermarket company, in June, we have been actively looking for an excellent synergistic acquisition opportunity like Pep Boys, which has enormous growth potential, strong brand recognition, and well-known, best-in-class customer service.”

“We are very pleased to have reached this agreement, which delivers outstanding value to Pep Boys’ shareholders, provides new opportunities for Pep Boys employees and allows Pep Boys to benefit from the significant expertise and resources of Icahn Enterprises,” said Scott Sider, CEO of Pep Boys. “There are tremendous opportunities for Pep Boys and Auto Plus, a company that shares Pep Boys’ unwavering commitment to best-in-class customer service and solutions. I am confident in Pep Boys’ strong future growth prospects as an Icahn Enterprises portfolio company.”