Pep Boys soars on latest Icahn offer; Bridgestone bows out

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NEW YORK (AP) — Carl Icahn appears to have emerged as the winner of the bidding war for auto parts and services retailer Pep Boys after Japanese tiremaker Bridgestone said it won't counter his latest offer of about $1 billion.

Shares of Pep Boys hit their highest point in eight years on Tuesday after the company received a sweetened offer from Icahn of $18.50 in cash per share. That was up $2 per share from Icahn's earlier bid and $1.50 better than the latest from Bridgestone.

Late Tuesday, Bridgestone indicated it was bowing out of the bidding war, saying it won't make a counter offer to top Icahn's latest.

Pep Boys' stock has been ratcheting steadily higher over the past two months as a takeover bid from Bridgestone turned into a fight for control with Icahn. Philadelphia-based Pep Boys — Manny, Moe & Jack has about 800 outlets selling auto parts and offering vehicle maintenance.

Its stock has jumped 94 percent from this time last year and rose almost 9 percent Tuesday to $18.94, a level not seen since the middle of 2007.

But after Bridgestone said it would not top Icahn's $18.50 a share bid, the stock slumped more than 3 percent to $18.32 in after-hours trading Tuesday.

Rumors of a sale of Pep Boys emerged more than two years ago with the exit of CEO Mike Odell and the arrival of three new board members who were nominated by a huge stakeholder in the company. The company's tire business has been under pressure and it has sought new ways to generate cash.

The fight over Pep Boys is a small part of an unprecedented year in mergers and acquisitions. The value of buyouts proposed and completed this year has reached a staggering $5.03 trillion, up 37 percent from just last year, according to Dealogic.

It is the first time that takeovers have exceeded the $5 trillion level, fueled by extremely low interest rates. The Federal Reserve raised interest rates for the first time in nearly a decade less than two weeks ago.

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