Carl Icahn's Icahn Enterprises LP has won the bidding war for Pep Boys, beating out Japanese tire giant Bridgestone with an all-cash $1 billion offer.
Icahn, who is expected to split the company and merge its retail side with his Auto Plus car parts network, offered $18.50 in cash for each share of Pep Boys, or $1.03 billion in total, on Monday, surpassing Bridgestone's most recent offer of $17 per share, according to the Associated Press.
Bridgestone announced it would not counter the bid from Ichan Enterprises on Tuesday, yielding the merger deal that it had agreed upon with Pep Boys in October. At the time, it offered the auto parts chain $15 a share.
"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," Icahn, chairman of Icahn Enterprises, said in a statement.
"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," he added, according to AFP.
Icahn Enterprises will pay it a $39.5 million breakup fee since Pep Boys had already agreed to a deal with Bridgestone Corp.
The deal, which was unanimously approved by the boards of directors at Pep Boys and Icahn Enterprises, is expected to close in the first quarter of 2016, according to Reuters.
Pep Boys shares were down 55 cents at the end of trading Wednesday closing at $18.39, while Icahn Enterprises shares were up 60 cents closing at $62.12.
