Dec. 7, 2015—The Pep Boys–Manny, Moe & Jack, confirmed on Monday that it received notice that Carl C. Icahn and affiliated entities (Icahn) filed a Schedule 13D disclosing its beneficial ownership of approximately 12 percent of Pep Boys’ Common Stock.
The Schedule 13D also disclosed that Icahn had engaged in prior discussions regarding Icahn’s interest in Pep Boys.
As previously announced on Oct. 26, Pep Boys and Bridgestone Retail Operations LLC entered into a definitive marger agreement under which Bridgestone will acquire Pep Boys in an all-cash transaction for $15.00 per share.
The Background of the Offer section of Pep Boy’s solicitation/recommendation statement on Schedule 14D-9 previously filed in connection with the merger agreement describes its prior discussions with Icahn. The Schedule 14D-9 discloses that discussions took place over six months and did not result in Icahn’s presentation to the company of a transaction with a value superior to Bridgestone’s $15.00 per share offer. On Oct. 22, Icahn declined to increase its $13.50 per share proposal and since then, Icahn has not presented Pep Boys with any subsequent proposal.
On Friday, Icahn made a Hart-Scott-Rodino anti-trust filing in order to preserve its flexibility. The notice disclosed Icahn’s “good faith intention,” dependent upon various factors including market conditions, to acquire in excess of a majority of Pep Boy’s outstanding voting securities. However, the Schedule 13D filed by Icahn reserved its right to propose a variety of other transactions involving Pep Boys in order to achieve its stated interest in acquiring Pep Boys’ retail business.
These notices show that Icahn may be taking action to obtain negotiating leverage in its discussions with third parties regarding Icahn’s potential purchase of Pep Boys’ retail business.