Wall Street activist Carl Icahn upped the ante Monday in the fight over US auto service chain Pep Boys, topping Bridgestone's Christmas Eve offer by about nine percent.

Icahn, who wants to split the company and merge its retail side with his Auto Plus car parts network, offered $18.50 a share, or more than $1 billion, compared to Bridgestone's $17 proposal of December 24, worth $947 million.

The two sides have been battling since Bridgestone first sealed a takeover deal with the Philadelphia-based Pep Boys -- Manny, Moe & Jack at just $15 a share.

In a securities filing Icahn said he could pay an even higher price if Pep Boys does not increase the termination fee it must pay Bridgestone for canceling the October agreement.

The company operates a chain of 800 service and parts sales outlets across the United States, and buying it would elevate Bridgestone's US market position for its tires. The Japanese company already has 2,200 US outlets.