On the whole, the automotive services industry isn’t usually exciting enough to grab headlines, but one of the largest companies in the space has been the subject of a bidding war over the past several weeks — a bidding war that just declared a victor.
Pep Boys and Carl Icahn’s investment group, Icahn Enterprises, announced Wednesday (Dec. 30) that they had entered into a definitive merger agreement. Despite heavy pressure and repeated bids from Tokyo-based Bridgestone Retail Operations, which operates thousands of tire and car centers across the U.S., Icahn’s final bid of $18.50 per share for a cash total of $1.03 billion managed to secure the deal for Icahn Enterprises.
“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 U.S. automotive footprint,” Icahn 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.”
Scott Sider, CEO of Pep Boys, also explained that the merger puts Pep Boys in a position to explore new strategies in a retail landscape that demands more from brands every day.
“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,” Sider said. “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.”
Though the deal isn’t expected to be finalized until late Q1 2016, it’s safe to say that Icahn and Pep Boys already have some ideas on next moves.