Icahn will buy Pep Boys for $1 billion image

Icahn Enterprises is going to buy Pep Boys-Manny Moe & Jack for around $1 billion, just hours later after Bridgestone Corp left the bidding race to purchase the Philadelphia-based auto parts retailer.

The Japanese tire producer Bridgestone announced that it would not bid more that its latest proposal of $17 per share in order to compete with Icahn’s offer of $18.50 per share in cash.

The Pep Boys shares decreased 3% on Wednesday, while the shares from Icahn Enterprises fell around 1%.

Businessman and magnate Carl Icahn stated that Pep Boys’ retail auto parts venture is going to be a good match for Auto Plus, which is a car spare parts company bought in June by Icahn Enterprises. Moreover, Icahn will pay a $39.5 million termination fee to Bridgestone.The deal is predicted to be closed in the first four months of the following year.

Pep Boys shares have witnessd a rise of 93% for the entire year, while Icahn Enterprises shares went down 33.5% in 2015.

Icahn made the winning offer of $18.5 per share on Monday, after Bridgestone increased its initial bid by $1.5 per share to a total of $17 for each share on the 24th of December. Pep Boys stated that Icahn’s offer was better that the initial deal the brand accepted from Bridgestone, therefore, chose to end the agreement with the Japanese company in favor of Icahn’s latest offer.

Icahn’s final bid values Pep Boys at around $1 billion in total, but it has initially valued the American auto chain at $12.2 per share just a short time ago, at the beginning of December.