S&P: Pep Boys view now negative

Standard & Poor’s said it revised the CreditWatch placement on its ratings on Pep Boys – Manny, Moe & Jack, including the B corporate credit rating, to negative from developing.

The CreditWatch revision follows Pep Boys’ announcement that Icahn Enterprises LP’s latest bid to acquire the company is a superior proposal to Bridgestone Corp.’s. This outcome was reached after a series of back and forth bids between the two bidders that began in October 2015.

On Dec. 30, Pep Boys terminated its merger agreement with Bridgestone. While no capital structure details have been disclosed regarding the Icahn acquisition, S&P said it believes there is at least a 50% chance that leverage would increase from current levels by the Icahn purchase.

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