Bridgestone Loses Interest in Pep Boys (PBY) — Refuses to Counter Icahn’s Offer

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While shareholders of Pep Boys – Manny Moe & Jack (NYSE:PBY) had been betting on yet another counteroffer coming from Bridgestone before the new year, it appears as if those bets may have been wrong. Bridgestone has announced today that they will not be countering activist investor Carl Icahn’s $1 billion+ offer for the company.

As the bidding war between Icahn and Bridgestone comes to an end, Icahn’s offer of $18.50 per share of Pep Boys’ stock seems to be the top offer. While it is possible that another bidder could enter the arena, it seems likely that the company will in fact sell to Icahn for $18.50 per share. Icahn raised Bridgestone’s last bid by $1.50 a share, which pretty much did the Japanese company in. While employees of the company likely would have rather seen Bridgestone win the war, it appears they will now have to deal with Icahn, who is known for his cost-cutting ways.

The stock closed at $18.95 during the last trading session. It is up 82.64% since May 27, 2015 and is uptrending. It has outperformed the S&P500 by 84.91%.

From a total of 4 analysts covering Pep Boys-Manny Moe and Jack (NYSE:PBY) stock, 1 rate it a “Buy”, 2 a “Sell”, and 1 a “Hold”. This means that 25% of the ratings are positive. The highest target price is $13 while the lowest target price is $12. The mean of all analyst targets is $12.50 which is -34.04% below today’s ($18.95) stock price. Pep Boys-Manny Moe and Jack was the topic of 4 analyst reports since September 7, 2015 according to the firm StockzIntelligence Inc. Argus Research downgraded shares on November 24 to a “Sell” rating. Jefferies initiated PBY stock in a recent report from September 15 with a “Hold” rating.

The institutional sentiment decreased to 1.38 in Q2 2015. It’s down 0.76, from 2.14 in 2015Q2. The ratio fall, as 24 funds sold all their Pep Boys – Manny Moe & Jack shares they owned while 40 reduced their positions. 31 funds bought stakes while 57 increased their total positions. Institutions now own 46.45 million shares which is 5.43% less than the previous share count of 49.11 million in 2015Q2.

Signia Capital Management Llc holds 7.17% of its total portfolio in Pep Boys – Manny Moe & Jack, equating to 177,699 shares. Armistice Capital Llc owns 840,000 shares representing 3.5% of their total US portfolio. Moreover, Adirondack Research & Management Inc. has 1.92% of their total portfolio invested in the company, equating to 411,201 shares. The New York-based Teton Advisors Inc. has a total of 1.12% of their portfolio invested in the stock. Gamco Investors Inc. Et Al, a New York-based fund reported 6.83 million shares owned.

Since August 24, 2015, the stock had 1 buying transaction, and 0 sales for a total of $23,883 in net activity. Gamco Investors – Inc. Et Al bought 2,200 shares worth $23,883.

Pep Boys-Manny, Moe & Jack is a service and automotive aftermarket company. The company has a market cap of $942.56 million. The Company’s stores are organized into a hub and spoke network, including supercenters and service and tire centers. It currently has negative earnings. Supercenters average approximately 20,000 square feet and combine do-it-for-me service labor, installed merchandise and tire offerings with do-it-yourself (DIY) parts and accessories.

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