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Icahn trumps Bridgestone with $837 mln offer for Pep Boys

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Dec 7 (Reuters) - Carl Icahn offered to buy Pep Boys-Manny, Moe & Jack in a deal valuing the U.S. auto parts retailer at about $837 million, trumping Japanese tire maker Bridgestone Corp's offer of $810 million.

Icahn Enterprises LP offered $15.50 per Pep Boys share in cash, a 1.2 percent discount to Friday's close, but higher than Bridgestone's offer of $15 per share, also in cash.

Icahn had reported a 12.12 percent stake in Pep Boys on Friday and said the company's retail automotive parts business would be a perfect fit for Auto Plus, a competitor he controls.

Bridgestone had said on Oct. 26 that it would buy Pep Boys, a deal that would boost its retail network by more than a third in the United States.

"We believe our proposal is clearly superior to the $15.00 per share Bridgestone transaction," Icahn Enterprises' Chief Executive Keith Cozza said in a letter to Pep Boys' management on Monday. (http://1.usa.gov/1QruIwD)

Bridgestone and Pep Boys were not immediately available for comment.

Pep Boys shares were up about 1.8 percent at $15.97 in afternoon trading, indicating shareholders were expecting a higher offer.

The stock had risen about 29 percent since the Bridgestone deal was announced.

Unlike rivals AutoZone Inc and Advance Auto Parts Inc, Pep Boys has not benefited from a resurgent U.S. auto industry due to high costs eating into its earnings and falling sales at its do-it-yourself business.

Pep Boys has been on the block since June, when it said it was considering selling itself as part of a strategic review.

Both the deal values are based on Pep Boys' nearly 54 mln shares outstanding as of Aug. 29.

(Reporting by Sudarshan Varadhan in Bengaluru; Editing by Savio D'Souza)