Icahn group eyes Pep Boys' auto parts biz

NEW YORK (Dec. 7, 2015) — A company controlled by renowned stock market investor Carl Icahn has acquired a 12.1-percent share in Pep Boys – Manny, Moe & Jack and is proposing that Pep Boys' retail auto parts segment would make an “excellent synergistic acquisition” opportunity for Auto Plus, an automotive aftermarket company wholly owned by Icahn Enterprises Holdings L.P.

The move, disclosed on Dec. 4 in a Schedule 13D filing by Philadelphia-based Pep Boys, comes six weeks after Pep Boys' board of directors agreed unanimously to accept a $15 per-share offer from Bridgestone Americas for the entire company.

The auto retail parts segment represents up to a third of Pep Boys' annual sales of $2 billion, according to Pep Boys' financial data.

It's a business that's not part of Bridgestone's retail segment and which Bridgestone has as yet not addressed in its comments on the pending acquisition.

According to the Pep Boys filing, Icahn Enterprises spent $95 million to buy 6.56 million shares in recent weeks.

Icahn Enterprises said it intends to discuss with Pep Boys and “various parties that participated in the Issuer's strategic alternatives review process” regarding potential transactions involving the issuer's retail segment.

Auto Plus is the retail band name of Kennesaw, Ga.-based IEH Auto Parts L.L.C., which describes Auto Plus as a leading distributor of replacement parts, equipment, tools, accessories, paint and related products in the automotive aftermarket. Brent Windom is Auto Plus' president and CEO.

It operates 900 retail stores throughout the U.S. Icahn Enterprises bought the business in June from Canada's Uni-Select.

Bridgestone Americas released a statement saying the company is “excited about the swift and certain progress made toward finalizing our company's acquisition of Pep Boys in early 2016. We've quickly received all required regulatory approvals, including those related to anti-trust, and are now in the advantageous position of completing the tender offer and acquisition in approximately 30 days.” The tire maker added that is is “unable to comment further.”

However, in its own, earlier SEC filings, Bridgestone management considered a scenario in 2014 whereby it would acquire a few select locations from Pep Boys and partner with a major auto parts retailer to operate the retail segment in each of the locations.

This idea progressed to the point where Bridgestone approached Pep Boys in February 2015 about conducting a test run at a few locations, the filing said. Bridgestone singled out markets like Minneapolis, Oklahoma City and El Paso, Texas, for the trials.