Reuters: Mergers News: UPDATE 1-Pep Boys sale to PE firm canceled

Reuters: Mergers News Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

UPDATE 1-Pep Boys sale to PE firm canceled May 29th 2012, 23:44 Tue May 29, 2012 7:44pm EDT May 29 (Reuters) - Automotive parts and service chain Pep Boys-Manny, Moe & Jack said the sale of the company to private equity firm Gores Group has been called off. Shares of Pep Boys fell about 10 percent to $10.01 in trading after the bell on Tuesday on the New York Stock Exchange. Pep Boys will get $50 million in termination fees and will also be reimbursed for some merger-related expenses. "Our current intention is to use our cash on hand and the settlement proceeds to pay down our term loan this year and then to refinance our senior subordinated notes in 2013...," Pep Boys Chief Executive Mike Odell said in a statement. The company had agreed to be bought by Gores Group for about $791 million in cash in January, after years of trying to sell itself. However, earlier in May, Gores Group sought to delay the buyout after Pep Boys reported it had barely made a profit in the latest quarter.

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