Billionaire investor Carl Icahn's Icahn Enterprises LP (NASDAQ:IEP) has agreed to buy Pep Boys-Manny Moe & Jack (NYSE:PBY) for about $1 billion, hours after Bridgestone Corp quit the race for the U.S. auto parts retailer.
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Japanese tire maker Bridgestone said on Tuesday it would not raise its latest cash bid of $17 per share to counter Icahn's raised offer of $18.50 per share in cash.
Pep Boys shares fell about 3 percent in morning trading on Wednesday, while Icahn Enterprises shares declined about 1 percent. Pep Boys' retail auto parts business will be a perfect fit for Auto Plus, an auto spare parts company that Icahn Enterprises bought in June, Carl Icahn said in a joint statement.
Icahn Enterprises will also pay $39.5 million termination fee to Bridgestone. The deal is expected to close in the first quarter of 2016.
Pep Boys shares were trading at $18.37 and Icahn Enterprises shares were trading at $60.82.
Up to Tuesday's close, Pep Boys shares had risen about 93 percent this year, while Icahn Enterprises shares had fallen about 33.5 percent.