Parts Giant Pep Boys Has New Suitor in Carl Icahn

by Aaron Cole

Updated: December 22nd, 2020 Published: December 7th, 2015

Billionaire investor Carl Icahn disclosed a 12-percent ownership stake in Pep Boys and said that Auto Plus, a competitor which he owns, should consider buying the retail parts giant, Bloomberg reported.

In October, Bridgestone offered to purchase Pep Boys’ 800 company-owned stores for $835 million to add to its portfolio of 2,200 stores including Tires Plus, Firestone Complete Auto Care, Hibdon Tires Plus and Wheel Works. The acquisition would create the largest chain of automotive service centers, yet many analysts say Bridgestone may be preparing Pep Boys for a potential sale already.

That tender offer from Bridgestone will expire Jan. 4, according to the report.

Icahn’s move isn’t the first attempt at buying the Pep Boys chain. According to the Philadelphia Inquirer, Icahn initially offered to buy the chain at $13.50 per share, which the company refused in favor of Bridgestone’s $15 per share offer in October.

According to a Securities and Exchange Commission filing, Icahn’s move may be an attempt to “frustrate” Bridgestone from splitting off and selling parts of Pep Boys.

Shares of Pep Boys jumped to more than $17 per share Friday before settling around $16 Monday morning.

Retail auto repair stores may be a booming business soon. In July, IHS Automotive reported that the average age for a car in the U.S. was 11.5 years. In its report, IHS said the repair businesses should consider older vehicles as a growing market opportunity.

“I believe we need to begin thinking about that ‘sweet spot’ differently. Now that the average age is 11.5 years, the key repair opportunities must include vehicles older than 11 years, which hasn’t been considered by many in the marketplace up to now,” Mark Seng, global aftermarket practice leader at IHS Automotive, said in a July statement.

#AutoPlus #Bridgestone #CarlIcahn #Firestone #Parts #PepBoys #Repairs #TiresPlus #UsedCars

Aaron Cole

More by Aaron Cole

Comments

Join the conversation

4 of 21 comments

S2k Chris on Dec 07, 2015

I simply fail to understand the whole auto parts store model. In my old town, which was split between higher blue collar and lower white collar/professional about 50/50, and had about 50k people, we had at least 4 big name auto parts stores (Autozone, O'Reilly, etc) on the same street within about 2.5 miles of each other. And that's mirrored in almost every other town in Chicagoland; every one has an Autozone, Advanced, O'Reilly, NAPA, etc. How can they all be sustainable?

Like Reply
- See 1 previous
- 01 Deville on Dec 07, 2015
  
  ". How can they all be sustainable?" Try sourcing cheap chinese parts, slapping your brand name on it and selling it for thrice the going price on Ebay. The e-commerce averse still finds them a deal when compared to parts cost of repair chains, that have an even higher upcharge.
  
  Like
- 01 Deville on Dec 07, 2015
  
  My two experiences with Pepboys when I had my dear now departed deville. 1. Bad Alternator, qouted $700 4.5hr labor plus $250 part which is reasonable for a FWD Northstar, dealer qoute being $900. Got the part for S120 at Advance autoparts and had a shade tree guy replace it for $200. They charged may battery for free multiple times though and did check for free a junk alternator that I got from Ebay for $30. 2. ECBM control module went bad and was quoted $650 from both Pepboys and Caddy dealer. Took about an hour to take it out myself and got it rebuilt on Ebay for less than $60 shipping included.
  
  Like
CincyDavid on Dec 08, 2015

AAP and CarQuest now have the same parent company, so I suspect you'll see fewer and fewer CQ-branded stores. I absolutely detest Pep Boys and refuse to shop there. Retail brick and mortar part pricing is getting crazy vs. online shopping. As long as you don't need the part TODAY having it shipped from IPD or other reputable online vendors is a great alternative. There is a lot of value in having a parts store with a good counterman...but they are few and far between. I like NAPA stores because their staff seems to know more than the nitwits at AAP/Autozone/PepBoys. I always thought of NAPA and CarQuest as being more oriented toward professionals, AAP/Autozone/Pep Boys geared toward amateurs, and O'Reilly's somewhere in the middle. My recent experiences with O'Reilly's has been less-than-stellar...high prices, and stupid countermen.

Like Reply

Recent Comments

Rna65689660 For such a flat surface, why not get smoke tint, Rtint or Rvynil. Starts at $8. I used to use a company called Lamin-x, but I think they are gone. Has held up great.
Cprescott A cheaper golf cart will not make me more inclined to screw up my life. I can go 500 plus miles on a tank of gas with my 2016 ICE car that is paid off. I get two weeks out of a tank that takes from start to finish less than 10 minutes to refill. At no point with golf cart technology as we know it can they match what my ICE vehicle can do. Hell no. Absolutely never.
Cprescott People do silly things to their cars.
Jeff This is a step in the right direction with the Murano gaining a 9 speed automatic. Nissan could go a little further and offer a compact pickup and offer hybrids. VoGhost--Nissan has  laid out a new plan to electrify 16 of the 30 vehicles it produces by 2026, with the rest using internal combustion instead. For those of us in North America, the company says it plans to release seven new vehicles in the US and Canada, although it’s not clear how many of those will be some type of EV.Nissan says the US is getting “e-POWER and plug-in hybrid models” — each of those uses a mix of electricity and fuel for power. At the moment, the only all-electric EVs Nissan is producing are the  Ariya SUV and the  perhaps endangered (or  maybe not) Leaf.In 2021, Nissan said it would  make 23 electrified vehicles by 2030, and that 15 of those would be fully electric, rather than some form of hybrid vehicle. It’s hard to say if any of this is a step forward from that plan, because yes, 16 is bigger than 15, but Nissan doesn’t explicitly say how many of those 16 are all-battery, or indeed if any of them are.  https://www.theverge.com/2024/3/25/24111963/nissan-ev-plan-2026-solid-state-batteries
Jkross22 Sure, but it depends on the price. All EVs cost too much and I'm talking about all costs. Depreciation, lack of public/available/reliable charging, concerns about repairability (H/K). Look at the battering the Mercedes and Ford EV's are taking on depreciation. As another site mentioned in the last few days, cars aren't supposed to depreciate by 40-50% in a year or 2.