Pep Boys’ shares plunged nearly 25% in midday trading on Wall Street after reports that Los Angeles private equity firm Gores Group wants to delay a shareholders meeting in its $800-million buyout of the automotive retail chain.
Gores Group said it believes Pep Boy’s proxy statement, after a disappointing first quarter, “is no longer accurate,” according to a filing Tuesday with the U.S. Securities and Exchange Commission.
Gores wants to include in the company’s proxy a statement noting a “serious deterioration in the Pep Boys business,” the filing stated.
Pep Boys said quarterly results missed expectations, with earnings of $2 million expected on sales of as much as $526 million. It reported a loss for its fiscal fourth quarter, which ended Jan. 28, although it earned $28.9 million, or 54 cents a share, for the year, down from $36.6 million, or 70 cents, from the previous year.