Billionaire investor Carl Icahn raised his bid for Pep Boys - Manny, Moe and Jack to value the automotive parts and repair chain at $1 billion, topping last week's sweetened merger pact with Bridgestone Corp.

The activist, whose latest offer is worth $18.50 a share, has been involved in an extended bidding war for Pep Boys with the Japanese tire maker.

Pep Boys shares rose 6.2% to $18.48 in after-hours trading.

A representative from Pep Boys declined immediate comment, while a Bridgestone spokesman wasn't immediately available.

Philadelphia-based Pep Boys put itself up for sale earlier this year and initially entered a takeover deal with Bridgestone in October. Mr. Icahn, who also held talks with the company earlier this year, went public with his bid at the beginning of December.

In Monday's securities filing, Mr. Icahn's company, Icahn Enterprises LP, suggested it may be willing to further raise its bid, but added that it didn't intend to do so if Pep Boys agreed to increase the termination fee that would be paid to Bridgestone.

Such a move "would prevent a truly robust auction," Icahn Enterprises said.

Pep Boys had agreed Thursday to Bridgestone's raised takeover offer of $17 a share, which had arrived just before a deadline to match or exceed Mr. Icahn's earlier offer of $16.50 a share.

At that time, Pep Boys said the breakup fee in its revised Bridgestone pact was increased to $39.5 million from $35 million.

Icahn Enterprises had previously said that it would pay 10 cents a share above any Bridgestone offer, up to $18.10 a share, under a "ratchet" structure.

Pep Boys was founded in 1921 and has more than 800 locations, according to its website. The company sells everything from tires to air fresheners and brake kits. It has been ailing amid weakness in its tire business, and it has been spending to try to ignite sales growth.

Write to Tess Stynes at tess.stynes@wsj.com

(END) Dow Jones Newswires

December 28, 2015 17:45 ET (22:45 GMT)

Copyright (c) 2015 Dow Jones & Company, Inc.
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