Pep Boys announced that on Dec. 22 its board of directors, after consultation with its independent legal and financial advisors, determined that a revised proposal received the same day from Icahn Enterprises L.P. to acquire Pep Boys continues to constitute a “Superior Proposal” as defined in the company’s agreement and plan of merger with Bridgestone Retail Operations LLC. The revised proposal improved the purchase price from $16.50 per share to the greater of (1) $16.50 per share and (2) “a price equal to 10 cents more per share than any increased bona fide bid offered by Bridgestone, up to a maximum of $18.10 per share.”
As part of its revised proposal, Icahn delivered to the company a revised, signed merger agreement that continues to not be subject to due diligence or financing conditions and contains a “hell or high water” anti-trust covenant.
Also on Dec. 22, Pep Boys delivered notice to Bridgestone of the board’s determination and intention to effect a change of recommendation and to terminate the Bridgestone agreement. Such notice commenced a two-business-day period that will expire at 5 p.m. EST on Dec. 24, during which time the company may not change the recommendation nor terminate the Bridgestone agreement, and Bridgestone has the right to make proposals to the company.
As previously announced on Oct. 26, the company entered into the Bridgestone agreement pursuant to which Bridgestone commenced, on Nov. 16, a tender offer for all outstanding shares of Pep Boys at $15 per share in cash. On Dec. 11, the parties announced that the price per share had been increased to $15.50.
There can be no assurance that a transaction with Icahn will result or that Bridgestone will propose any adjustments to the Bridgestone agreement. The Pep Boys Board has not changed its recommendation with respect to the Bridgestone transaction, nor has it made any recommendation with respect to the Icahn proposal.
Rothschild is acting as the exclusive financial adviser to Pep Boys and Morgan, Lewis & Bockius LLP is acting as legal adviser.
