Under the merger, announced in January, Gores would have paid $15 a share for Pep Boys, valuing the retailer at almost $1 billion, according to Bloomberg. Shares of Pep Boys plummeted more than 21% in Wednesday trading, falling under $9.
Some Pep Boys investors, including Sophis Investments said the Gores offer undervalued the retail chain.
After Pep Boys released first-quarter results, which missed analysts’ forecasts, in early May, Gores requested additional time to study the results, noting that they might contain information that could terminate the deal.
Pep Boys refused to delay a shareholder vote on the merger that had been planned for today.
Gores will pay Pep Boys $50 million to compensate the company for expenses pertaining to the proposed merger. The retail chain would have owed Gores $25 million had it received a higher bid, or if shareholders had rejected the deal.