Billionaire Investor Carl Icahn Beats Out Bridgestone Offer for Pep Boys
Japanese Tire Giant Declines to Top Offer
Back in October, you may remember our report that Japanese tire giant Bridgestone had announced its intention of buying Pennsylvania-based auto parts and repair chain Pep Boys for slightly less than $1 billion. Soon afterward, Icahn Enterprises, the investment arm of 79-year-old billionaire investor Carl Icahn, made moves to counter Bridgestone’s offer with a better one. There was at least one counter-offer from Bridgestone for $17 per share cash. However, Bridgestone finally bowed out after Icahn’s latest offer of $18.50 per share, valuing the chain at more than $1 billion.
Many are speculating that Icahn is hoping to create synergies between Pep Boys and Canadian auto parts chain Auto Plus, as well as tier-one automotive supplier and parts maker Federal Mogul. Icahn’s company has majority holdings in both companies. Although new vehicle sales are at an all-time high, the average age of vehicles on U.S. roads remains high at 11.4 years, leading many analysts to believe that auto replacement and repair parts will remain a lucrative business for the foreseeable future.
Icahn has a long-standing reputation as an aggressive activist investor, known for his hostile takeover of TWA airlines in the 1980s. His activity and opinions are closely watched in the investing community, and on Icahn’s favorable comments on Apple Inc. in 2013, the stock went up 5 percent.