Icahn Enterprises LP isn’t giving up on its acquisition target, Pep Boys — Manny, Moe & Jack. On Dec. 28 Icahn increased its offer to $18.50 per share, outbidding Bridgestone Retail Operations LLC by $1.50 per share.
The $18.50-per-share price places the value of Pep Boys above $1 billion.
Also on Dec. 28, the Pep Boys board determined Icahn's offer is "superior" to the previous Bridgestone offer of $17 per share. Pep Boys has given Bridgestone official notice of its determination of the "superior" bid from Icahn, and as a result Bridgestone once again has three days to make a counter offer. Bridgestone must respond by 5 p.m. Eastern Time on Dec. 31.
As the two companies jockey back and forth on the stock price, there’s another term of the deal coming to the forefront — the termination fee. Bridgestone’s Dec. 24 offer of $17 per share also increased the termination fee from the original $35 million to $39.5 million. In its latest U.S. Securities and Exchange Commission filing, Icahn argues increasing the termination fee “is contrary to the best interests” of Pep Boys shareholders “because it would prevent a truly robust auction.” (Icahn holds 12% of the company’s available shares.)
And here’s another nugget from Icahn’s latest offer: it might be willing to pay even more, but “does not intend to bid any higher than $18.50 per share if the issuer agrees to any increase of Bridgestone’s termination fee.”
Just made a new offer to acquire Pep Boys for $18.50 per share: https://t.co/w9OLzD7jFD— Carl Icahn (@Carl_C_Icahn) December 28, 2015