On Friday, after activist investor Carl Icahn revealed a 12.1% stake in Pep Boys – Manny, Moe & Jack (NYSE: PBY), the stock bounced big in after-hours trading, but cooler heads appear to have prevailed Monday morning and the stock opened about 2% higher than its Friday close.
While an Icahn investment can often drive a big jump in a stock’s price, it’s tougher in this case because Pep Boys already has agreed to be acquired by Japan-based tire maker Bridgestone for around $835 million in cash. About all Icahn can do is try to wring a few more bucks out of Bridgestone. Or he could kill the deal altogether.
In a press release Monday morning, Pep Boys noted that Icahn said in his Friday Schedule 13D filing that he had “engaged in prior discussions with the Company regarding Icahn’s interest in Pep Boys and, in particular, its retail business.” Then Pep Boys referred to a filing of its own in October:
The Schedule 14D-9 discloses that such 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. Notably, on October 22, 2015, Icahn declined to increase its previously delivered $13.50 per share proposal for the Company and, since that date, Icahn has not presented the Company with any subsequent proposal.
Icahn’s filing last week also included a Hart-Scott-Rodino antitrust filing that Pep Boys said “reserved [Icahn’s] right to propose a variety of other transactions involving Pep Boys in order to achieve its stated interest in acquiring Pep Boys’ retail business.”
Here’s Pep Boys’ conclusion:
These notices have raised concerns that Icahn may be taking these actions to obtain negotiating leverage in its discussions with third parties regarding Icahn’s potential purchase of Pep Boys’ retail business and, as a result, Pep Boys shareholders’ ability to realize the value presented by the Bridgestone offer may be frustrated.
So, instead of driving up the share price (Pep Boys stock rose about 9% in the Friday after-hours session), Icahn’s announcement has moved it up about 2%. Shares traded at $16.03 in the first hour of Monday’s session, up about 2.2% from Friday’s closing price of $15.69. The stock’s 52-week range is $8.00 to $16.50.
Are You Still Paying With a Debit Card?
The average American spends $17,274 on debit cards a year, and it’s a HUGE mistake. First, debit cards don’t have the same fraud protections as credit cards. Once your money is gone, it’s gone. But more importantly you can actually get something back from this spending every time you swipe.
Issuers are handing out wild bonuses right now. With some you can earn up to 5% back on every purchase. That’s like getting a 5% discount on everything you buy!
Our top pick is kind of hard to imagine. Not only does it pay up to 5% back, it also includes a $200 cash back reward in the first six months, a 0% intro APR, and…. $0 annual fee. It’s quite literally free money for any one that uses a card regularly. Click here to learn more!
Flywheel Publishing has partnered with CardRatings to provide coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.