Published On: Tue, Dec 8th, 2015

Billionaire investor Carl Icahn offers to buy Pep Boys for $867 million

 

Carl Icahn gives an interview on FOX Business Network's Neil Cavuto show in New York

 

On Monday,  Pep Boys-Manny Moe & Jack (PBY) rose 2.7% after activist investor Carl Icahn reported a 12.12% stake in the auto services company.

before the Icahn proposal was announced, Pep Boys had questioned the firm’s motives in acquiring approximately 12% of the auto service company.

The company expressed concern that Icahn may have acquired shares to obtain negotiating leverage to purchase Pep Boys’ retail business and frustrate an existing agreement to sell the company to Bridgestone Retail Operations LLC for $15 a share in cash.

Icahn revealed in a filing on Friday that a merger with Pep Boys would offer an “excellent synergistic acquisition opportunity” for his fund, Icahn Associates, which also owns Auto Plus. Argus cut Pep Boys-Manny Moe and Jack from a “buy” rating to a “sell” rating and set a $15.00 price target on the stock.in a research note on Tuesday, November 24th.

“We believe our proposal is clearly superior to the $15.00 per share Bridgestone transaction and that our financial wherewithal to close expeditiously is indisputable”, Icahn Enterprises executive Keith Cozza said in a letter to Pep Boys.

With 6.6 million shares, Icahn’s Icahn Enterprises would be the second largest shareholder of Pep Boys. Moreover, Adirondack Research & Management Inc. has 1.92% invested in the company for 411, 201 shares. Adirondack Research & Management Inc. owns 411, 201 shares representing 1.85% of their total U.S. portfolio. This means 40% are positive.

Icahn isn’t the only one buying Pep Boys. The stock dipped not long after, however, and as of this writing was up 1.85% at $15.99 per share after reaching as high as $16.48 per share earlier today. The biggest payout to victims in more than three years comes a week before the anniversary of Madoff’s December 11, 2008, arrest, when thousands of retirees, charities, investment funds, and other clients discovered they’d lost $17.5 billion in principal to his decades-long Ponzi scheme.

Pep Boys-Manny Moe and Jack announced its earnings results on Monday. Et Al bought 2, 200 shares worth $23, 883. The company’s market capitalization is $867.02 million.

Along with the disclosure, Icahn said he will continue to discuss a strategic combination between Philadelphia-based Pep Boys and Auto Plus but could propose alternative deals. It now has negative earnings.

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