NEW YORK (TheStreet) -- Shares of Pep Boys-Manny, Moe & Jack (PBY) - Get Report are up by 0.06% to $17.52 in pre-market trading on Monday morning as the company agreed to a $947 million takeover offer from Bridgestone Corp. (BRDCY), and snubbed a competing bid from Carl Icahn (IEP) on Thursday.
The company's board said it no longer considers the billionaire investor's bid to be superior, Bloomberg reported. Icahn said last week that he would beat any bid up to $1.01 billion.
Bridgestone's new offer of $17 a share tops Icahn's bid of $16.50 a share, but is still lower than the maximum of $18.10 a share that Icahn said he's willing to pay.
The agreement shows Pep Boys is willing to accept a lower price to complete the takeover with Bridgestone that it originally agreed to in October, Bloomberg reported.
"We cannot understand the actions of the directors in that they know we were willing to offer a lot more than $17," Icahn said in an interview with Bloomberg.
Bridgestone is a Japanese manufacturing company mainly engaged in the tire business.
Pep Boys is a Philadelphia-based service and automotive aftermarket company.
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate PEP BOYS-MANNY MOE & JACK as a Hold with a ratings score of C. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and poor profit margins.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Powered by its strong earnings growth of 166.66% and other important driving factors, this stock has surged by 81.43% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Specialty Retail industry. The net income increased by 164.5% when compared to the same quarter one year prior, rising from -$1.96 million to $1.27 million.
- The current debt-to-equity ratio, 0.36, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.17 is very weak and demonstrates a lack of ability to pay short-term obligations.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Specialty Retail industry and the overall market, PEP BOYS-MANNY MOE & JACK's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for PEP BOYS-MANNY MOE & JACK is currently lower than what is desirable, coming in at 26.36%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.24% trails that of the industry average.
- You can view the full analysis from the report here: PBY