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Pep Boys board: Icahn's $16.50/share bid 'superior proposal'

A Pep Boys auto parts store is shown in Encinitas, California.
Mike Blake | Reuters
A Pep Boys auto parts store is shown in Encinitas, California.

Auto service retailer Pep Boys said Monday its board of directors determined activist investor Carl Icahn's acquisition bid was a "superior proposal" to Bridegstone's.

Pep Boys received Icahn's takeover bid for $16.50 a share Friday and made the determination on Sunday, the company said. Shares of Pep Boys were up more than 4.5 percent in the premarket.

Read MorePep Boys shares jump 20% on takeover talk

"Also on December 20, 2015, the Company delivered notice to Bridgestone of the Pep Boys Board's determination and intention to effect a change of recommendation and to terminate the Bridgestone agreement," Pep Boys said in a release.

Bridgestone's takeover bid of Pep Boys amounts to $15.50 a share.

"There can be no assurance that a transaction with Icahn will result or that Bridgestone will propose any adjustments to the Bridgestone agreement," Pep Boys said.

"The Pep Boys Board has not changed its recommendation with respect to the Bridgestone transaction, nor has it made any recommendation with respect to the Icahn proposal."