Pep Boys saw mix of suitors, sources say

Provided exclusively by Mergermarket

Pep Boys (NYSE:PBY) drew interest from financial sponsors and strategics ahead of a deal with Bridgestone Americas announced on Monday, two sources familiar with the matter said.

The Philadelphia, Pennsylvania-based automotive aftermarket and services retailer said in late June it had hired Rothschild to help it review strategic alternatives. The first source described the review as a competitive process with a number of suitors.

Bridgestone, the Japanese tire giant, plans to acquire Pep Boys for USD 15 per share, or roughly USD 835m in aggregate equity value. The tender offer is expected to close in early 2016.

Pep Boys sought a high level of certainty before going into the deal, according to the first source, having failed to conclude its proposed sales to private equity firm The Gores Group in 2012 for USD 1bn. This source said that the tender process required a specific performance undertaking by Bridgestone, and that there will be no go-shop period.

Pep Boys settled with activist investor GAMCO Asset Management in June.

J.P. Morgan is the financial advisor to Bridgestone and Jones Day is its legal advisor. Morgan, Lewis & Bockius is advising Pep Boys along with Rothschild.

By Siobhán Brett and Sam Weisberg

As seen in the mergermarket newsletter on 26/10/2015


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