Icahn to buy Pep Boys for $1 billion after Bridgestone bows out

Japanese tire maker Bridgestone said on Tuesday it would not raise its latest cash bid of $17 per share to counter Icahn's raised offer of $18.50 per share in cash.

(Reuters)

Pep Boys shares fell about 3 percent in morning trading on Wednesday, while Icahn Enterprises shares declined about 1 percent.

Pep Boys' retail auto parts business will be a perfect fit for Auto Plus, an auto spare parts company that Icahn Enterprises bought in June, Carl Icahn said in a joint statement.

Icahn Enterprises will also pay $39.5 million termination fee to Bridgestone.

The deal is expected to close in the first quarter of 2016.

Pep Boys shares were trading at $18.37 and Icahn Enterprises shares were trading at $60.82.

Up to Tuesday's close, Pep Boys shares had risen about 93 percent this year, while Icahn Enterprises shares had fallen about 33.5 percent.

(Reporting by Ankit Ajmera in Bengaluru; Editing by Kirti Pandey)