, who was once 9.99 percent owner of railcar maker, Greenbrier
Companies Inc. (
), has now taken a leap back from its ownership and reduced his
stake by 65.9 percent, reported on Dec. 21 according to
GuruFocus Real Time Picks
. The reduction came after Greenbrier rejected Icahn's second
bid, teaming up with American Railcar (
) as Icahn oversaw plans to merge the two companies.
(To read about his first bid, go to
Carl Icahn Pursues Greenbrier
Icahn, who owns 55.6 percent of American Railcar's outstanding
shares, now holds a measly 924,262 shares of Greenbrier after the
reduction, compared to the 2.7 million he originally owned when
he first acquired the stock in November. This currently
represents 3.41 percent of Greenbrier's outstanding shares.
Icahn's second bid placed Greenbrier's worth at $22 per share,
only $2 higher from Icahn's original proposal.
On Dec. 20, Greenbrier issued a press release, repeating the same
sentiment as its first rejection, stating that Icahn's offer of
$20 to $22 per share greatly undervalues the company and is "not
The press release also addressed a letter written by Icahn
Enterprises LP President and CEO, Daniel Ninivaggi, where
Ninivaggi stated that they are "extremely perplexed" by
Greenbrier's bid rejections, claiming that Greenbrier had once
said that it would "seriously entertain an offer between $20 and
$22 per share."
Ninivaggi further argues:
"On the day prior to the disclosure of American Railcar's
ownership interest in Greenbrier, the company's stock closed at
$13.95 per share. Moreover in the company's last earnings
release, you disclosed that fiscal 2013 railcar deliveries are
forecasted to decline by 13% to 23% from 2012 levels and
Greenbrier's stock price declined by 23% during the days
following the release. But even if you believe that American
Railcar's $20 per share offer is inadequate, why would your
representative encourage us to make the offer in the first
"The offer price represents a 57% premium to the closing
price of Greenbrier's stock on the day before American Railcar
disclosed its ownership interest in the company and a 46% premium
to the volume weighted average price of Greenbrier stock during
the 30 trading day period prior to such date. American Railcar's
offer represents full value for Greenbrier and will not be
increased under any circumstances." (Read the original
Icahn Enterprises gave Greenbrier until Dec. 21 to make a
yes-or-no decision, which obviously did not turn out in the favor
of either of the companies.
Greenbrier's stock is down 4.6 percent today, trading at $15.54.
American Railcar, which is also down today by 3.16 percent, is
trading at $31.24.
ARII data by GuruFocus.com
On GuruFocus, both companies are ranked 6 in Financial Strength
and 5 in Profitability and Growth.
American Railway remains Icahn's seventh largest holding.
View more of Icahn's latest trades here. Also view his
undervalued stocks, top growth companies and high yield stocks.
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