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Bridgestone Will Not Counter Latest Icahn Bid for Pep Boys.

M2 EQUITYBITES-December 31, 2015-Bridgestone Will Not Counter Latest Icahn Bid for Pep Boys

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31 December 2015 - Japanese tyre maker Bridgestone's US-based Bridgestone Retail Operations, LLC subsidiary will not present a counter offer to acquire The Pep Boys Manny, Moe and Jack (Pep Boys; NYSE: PBY) in response to the most recent proposal from Icahn Enterprises L.P. of USD 18.50 per share, the company said.

Last week, the board of US-based auto parts retail chain The Pep Boys Manny, Moe and Jack (NYSE: PBY), after consultation with its independent legal and financial advisors, determined that the proposal from Icahn would constitute a "Superior Proposal" as defined in the company's agreement and plan of merger with Japanese tire maker Bridgestone, the company said.

Earlier this month, the Pep Boys board determined that the Icahn proposal was likely to be superior; with last week's release its clear they have confirmed the finding.

Bridgestone previously announced on 16 November that TAJ acquisition Co., a subsidiary of Bridgestone Retail Operations, LLC, had launched a cash tender offer to purchase all outstanding shares of Pep Boys for USD 15.00 for each share, without interest and less any applicable tax withholding.

The deal is worth approximately USD 835m in aggregate equity value.

As part of its proposal, Icahn delivered to the company a merger agreement signed by Icahn that is not subject to due diligence or financing conditions and contains a "hell or high water" anti-trust covenant.

Also on 20 December 2015, the company delivered notice to Bridgestone of the Pep Boys Board's determination and intention to effect a change of recommendation and to terminate the Bridgestone agreement.

Such notice commenced a three business day period that will expire on 23 December 2015, during which the company may not change the recommendation nor terminate the Bridgestone agreement, and Bridgestone has the right to make proposals to the company.

The Pep Boys Board has not changed its recommendation with respect to the Bridgestone transaction, nor has it made any recommendation with respect to the Icahn proposal.

Pep Boys, headquartered in Philadelphia, is an automotive aftermarket chain that started in 1921. With more than 7,500 service bays in more than 800 locations in 35 states and Puerto Rico, Pep Boys offers tires, maintenance and repair and parts and accessories.

Rothschild is acting as the exclusive financial advisor to Pep Boys and Morgan, Lewis and Bockius LLP is acting as legal advisor.

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