July 1, 2015—On Tuesday, Pep Boys announced that its board of directors has started a review of strategic alternatives to enhance shareholder value, including a possible sale, merger or other form of business combination or strategic transaction.
The board will be assisted in its review by Rothschild Inc. as its financial advisor and Morgan, Lewis & Bockius LLP as its legal advisor. Both Rothschild and Morgan, Lewis & Bockius have been advising the board in connection with the various inquiries that have been previously received from third parties expressing an interest in a potential transaction.
The board determined it appropriate to conduct a strategic review that evaluates Pep Boys’ current long-term business plan against a broad range of alternatives that have the potential to enhance shareholder value, according to a company release.
“The Board is encouraged by the value-enhancing initiatives that our management team has been pursuing and the progress that we have made in growing comparable store sales, driving gross margin returns, reducing expenses, shrinking inventory and unlocking the value of our real estate by rationalizing our store base. We will continue to focus on these value-enhancing opportunities under the leadership of Scott Sider, our new CEO,” said Bob Hotz, the board’s chairman. “However, in keeping with our commitment to act in the best interests of all shareholders, and given that a number of potential strategic and financial buyers have expressed an interest in discussing a transaction with Pep Boys, we have determined that it is prudent to explore strategic alternatives to determine the best opportunities for enhancing shareholder value at this time.”
There is no set timetable for the strategic review process, and Pep Boys has not made a decision to pursue a transaction. Pep Boys does not intend to make a comment or disclose further information until the board approves a specific action or concludes its review of strategic alternatives.
