Pep Boys' stock plunged 22% following the collapse of a buyout deal with a Los Angeles-based private equity firm.
The Philadelphia-based automotive retail and repair chain on Tuesday announced the termination of its planned $1.1-billion buyout by The Gores Group.
Pep Boys, which has 130 shops in California, said Gores would pay the company a $50-million termination fee and reimburse it for expenses related to the aborted merger, according to a filing with the U.S. Securities and Exchange Commission.
Gores agreed to buy Pep Boys in January and pay $15 a share. The private-equity firm appeared to get cold feet earlier this month after Pep Boys announced disappointing first-quarter earnings.