Bloomberg News

Icahn Sells Most Greenbrier Stock After Second Bid Fails

December 22, 2012

Billionaire Carl Icahn

Carl Icahn, billionaire investor and chairman of Icahn Enterprises Holdings LP. Photographer: Scott Eells/Bloomberg

Billionaire investor Carl Icahn, who controls American Railcar Industries Inc. (ARII:US), sold most of his holdings in competitor Greenbrier Cos. (GBX:US), signaling an end to his takeover ambitions after a second offer was rejected.

Unloading 1.79 million shares at $15.41 each left Icahn a stake equal to 3.41 percent, down from 9.99 percent, according to a U.S. regulatory filing yesterday. American Railcar had said it would drop its bid yesterday unless Greenbrier took a sweetened $22-a-share offer, 10 percent more than the company’s initial bid this week.

Greenbrier said on Dec. 20 that while the revised offer still undervalued the Lake Oswego, Oregon-based company, it was willing to continue negotiations on a tie-up. Combining Greenbrier and St. Charles, Missouri-based American Railcar would have created the largest U.S. railcar producer.

The sale may mark the end of Icahn’s quest to buy a company he also pursued four years ago. He began talks in November after disclosing his new stake only to see his bids rebuffed this week as too low, dragging Greenbrier’s shares since Dec. 20 to their biggest two-day decline since August last year.

Greenbrier fell 11 percent to $16.14 yesterday in New York after dropping 12 percent the previous day and now is at the lowest value since Nov. 12, the day before Icahn disclosed his 9.99 percent stake in the company. American Railcar fell 2.6 percent to $32.24 yesterday after dropping 8 percent the previous day.

‘Extremely Perplexed’

In a Dec. 19 letter to Greenbrier after the first bid was spurned, Icahn Enterprises LP (IEP:US) Chief Executive Officer Daniel A. Ninivaggi complained that Greenbrier’s investment banker had encouraged an offer of $20 to $22 and said he was “extremely perplexed” at the rejection.

Greenbrier rebutted the claim that it invited a bid in that range and said it had made clear to Icahn during negotiations that such an offer would be too low.

It’s unlikely there will be another bidder for Greenbrier, Michael Baudendistel, an analyst with Stifel Nicolaus & Co., said in a Dec. 20 note in which he cut his rating on Greenbrier to hold from buy.

The “offer price represents a full and fair value for the company’s shares,” Baudendistel said. “Icahn walking away from this deal would certainly not be unprecedented.”

Greenbrier declined to comment on Icahn’s sale of shares or whether negotiations between the two companies had been terminated, Jack Isselmann, a spokesman, said by e-mail yesterday. Chief Financial Officer Mark Rittenbaum didn’t respond to a phone message seeking comment.

To contact the reporter on this story: Thomas Black in Dallas at tblack@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net


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Companies Mentioned

  • ARII
    (American Railcar Industries Inc)
    • $68.05 USD
    • -1.73
    • -2.54%
  • GBX
    (Greenbrier Cos Inc/The)
    • $62.3 USD
    • -0.68
    • -1.09%
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