Pep Boys Shares Surged: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Pep Boys (NYS: PBY) zoomed 23% higher on Monday after private equity firm Gores Group said it would acquire the auto parts retailer for about $1 billion.

So what: The deal, which is expected to close in the second quarter, values Pep Boys at $15 per share and represents a 24% premium to its closing price on Friday. "Our Board firmly believes that this transaction is in the best interests of all of our stakeholders and delivers an ongoing commitment to excellence for our customers and employees," said Pep Boys CEO Mike Odell.

Now what: When you make 20%-plus in one morning, taking at leastsome dough off the table seems like the prudent thing to do. The deal is still subject to shareholder approval, after all, so Pep Boys investors shouldn't wait too long to book some of those juicy gains. While Pep Boys may now solicit competing bids for a 45-day "go-shop" period, holding out for a dramatically better offer seems a tad risky.

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At the time thisarticle was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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