**Carl Icahn Takes Significant Stake in Monro: What It Means for Shareholders**
**Activist**: Carl Icahn
**Ownership**: 14.79%
**Average Cost**: $19.08
**Background on Carl Icahn**
Carl Icahn is widely regarded as the grandfather of shareholder activism and a true pioneer of the strategy. Passionate about shareholder rights and good corporate governance, Icahn is known for going to extreme lengths to challenge incompetent boards and over-compensated managers. Over his more than six-decade-long career, he has invested across all sectors and has substantial experience in the automotive parts and services industry. Notably, Icahn has been involved in several mergers and acquisitions in this space through Icahn Automotive, a segment of his conglomerate, Icahn Enterprises. This includes the acquisition of Pep Boys–Manny Moe and Jack in 2016 and Federal Mogul in 2017.
**What’s Happening at Monro**
On November 5, Carl Icahn filed a 13D with the U.S. Securities and Exchange Commission, disclosing a 14.79% position in Monro. Monro is a leading provider of automotive undercar repair and tire services in the United States, operating more than 1,100 repair shops and tire dealers in 32 states under multiple regional brands.
The company has faced several challenges in recent years. These include macroeconomic factors such as lower consumer demand, higher material and labor costs, and a trend toward consumers choosing lower-margin tire products. These pressures led to a 4.9% decrease in sales for fiscal year 2025, marking the second consecutive year of meaningful revenue decline. In response, Monro announced plans to close approximately 145 underperforming locations.
Most recently, Monro’s third-quarter earnings report disappointed investors, with weaker-than-expected revenue results and no specific financial guidance for the upcoming fiscal year. Shares fell 16.7% the next day. Many shareholders have also questioned the company’s sizable dividend payout ratio, which has remained relatively high despite ongoing struggles.
**Share Performance and Icahn’s Opportunity**
Taking these challenges together, it’s little surprise that Monro’s shares have significantly underperformed: down 44.73%, 66.73%, and 63.25% over the past 1-, 3-, and 5-year periods, respectively, prior to Icahn’s announcement. Perhaps this depressed valuation is what caught Icahn’s attention. He disclosed his stake shortly after a major stock downturn on October 29, acquiring 67% of his position in that period—immediately sending the stock up over 15%.
This isn’t Icahn simply taking a chance on the automotive industry. With his rich history in automotive parts and services, he likely sees Monro as a great business significantly undervalued.
**A Pivotal Moment for Governance**
The timing of Icahn’s engagement is also highly significant. Monro recently agreed to collapse its dual-class share structure, previously granting its sole Class C shareholder, Peter Solomon, veto power over any shareholder vote and effectively making Monro a controlled company. With approval granted in 2023, this collapse will occur before the 2026 annual meeting, expected next August.
For shareholders, this means Monro will shift from being a privately run company to a publicly governed one, for the benefit of all shareholders. A reconstituted board, focused on collaboration and productivity, can now become a reality—and there are few better or more experienced candidates for leading this effort than Carl Icahn.
Peter Solomon, an 87-year-old renowned investment banker, and Carl Icahn are contemporaries, though there’s no evidence they’ve interacted directly. Nevertheless, their shared experience and likely mutual respect create the possibility for a civil and constructive partnership. Ideally, both will work together to establish a board that will oversee management, hold them accountable, and guide the company into its next phase as a truly public entity.
**Potential for Acquisition**
Yet, there remains the possibility Icahn may have greater ambitions. Icahn has a track record of launching activist campaigns at automotive companies that he later acquired, including Pep Boys and Federal Mogul. Upon acquiring Pep Boys, Icahn stated:
> “We believe that with our abundant resources and knowledge of the industry we will be able to grow this business and take advantage of consolidation opportunities, thereby benefiting customers, manufacturing partners and employees, as well as our shareholders.”
While the primary motivation for this investment may be Icahn’s belief that Monro is at an inflection point and undervalued, the potential for a full acquisition cannot be ruled out. Although the current stake is relatively small and a good return alone may not be significant for him, a synergistic integration with Icahn Enterprises’ automotive business could have substantial strategic benefits. Both scenarios are possible.
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*Ken Squire is the founder and president of 13D Monitor, an institutional research service on shareholder activism, and the founder and portfolio manager of the 13D Activist Fund, a mutual fund that invests in a portfolio of activist investments.*
https://www.cnbc.com/2025/11/08/carl-icahn-returns-to-a-familiar-sector-auto-repair-as-he-builds-a-15percent-stake-in-monro.html