PHILADELPHIA (HedgeWorld.com)–The Pep Boys–Manny, Moe & Jack–announced Thursday that they’ve reached agreement with a group of activist hedge funds led by Barington Capital Group LP, New York. The auto repair and maintenance company will increase the size of its board of directors from nine to 10, and it has announced the resignation of three of the incumbents.
The company will appoint four new directors proposed by Barington to the four open seats.
The other funds involved in the negotiations that led to this agreement included Ramius Capital Group LLC, and D.B. Zwirn & Co. LP, both of New York.
One of the three board members who resigned, thereby paving the way for this agreement, was Benjamin Strauss, the son of company founder Maurice (“Moe”) Strauss. Also, Malcolm D. Pryor and Lawrence Stevenson resigned. Mr. Pryor said that the firm’s independent auditors recently hired his son, so under the New York Stock Exchange rules he would no longer be able to serve on any of the board’s committees.
The hedge funds together own 9.9% of the equity of Pep Boys. They’ve proposed for board membership: Max L. Lukens, James A. Mitarotonda, James A. Williams, and Alan S. Bernikow. Mr. Bernikow is the retired chief executive of Deloitte & Touche LLP, and he would have to receive permission from Deloitte to join the board. Should that permission not be granted, the Barington’s group will select another director for that seat, the statement said.