By Roland Jones
Shares of Pep Boys (PBY) were down more than 20 percent after private equity firm Gores Group walked away from a $791 million deal to buy the auto parts retailer.
Gores had offered $15 per share for Pep Boys (you know, Manny, Moe & Jack) in January, but earlier this month sought to delay the shareholder meeting to vote on the deal, citing serious deterioration in Pep Boys' business.
Pep Boys on Tuesday cancelled the shareholder meeting scheduled for Wendesday, after agreeing to terminate the Gores deal, and said it would receive $50 million from the private equity firm.
Pep Boys, which barely made a profit in the first quarter, said results were below expectations due to a variety of factors that occur in the ordinary course of business.
Pep Boys has tried to sell itself many times in the past without any success.
Its smaller rival Midas was recently bought by a unit of Sumitomo for $173 million. Another competitor Monro Muffler last week said it would accelerate the pace of acquisitions amid weak demand.
Sophis Investments LLC, an investment advisory firm, on Tuesday said it sent a letter to the Pep Boys board asking them not to adjourn the shareholder meeting.
A voluntary adjournment gives credence and the appearance of validity to Gores' claims, Sophis' president Tassos Recashinas said in the letter.
Reuters contributed to this report.
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