Wednesday, November 14, 2012

Greenbrier Cos. affirms Icahn stock acquisition

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The Greenbrier Cos. late Tuesday affirmed that "Carl C. Icahn and Reporting Persons affiliated with him have acquired 9.99% of the outstanding Common Stock of Greenbrier."

Icahn, who also owns a majority interest in American Railcar Industries, Inc. (ARII), on Monday contacted Greenbrier's president and chief executive officer, Bill Furman, to notify him of the investment and spoke about past discussions and investments with Greenbrier. He suggested the parties have further discussions possibly relating to strategic opportunities. Mr. Icahn added he believes that Greenbrier shares are undervalued, Lake Oswego, Ore.-based Greenbrier said.

Greenbrier noted that no specific proposals or opportunities have been suggested, nor any specific times established for further conversations.

Said Furman, "Mr. Icahn is a respected investor, and we have had considerable interaction on several occasions in the past with him and ARII. We are joint venture partners with ARII in Ohio Castings. We also have worked together with ARII in the past to our mutual benefit, including purchasing over 2,000 railcars from them, and subcontracting the manufacture of railcars to them.

"We believe this purchase of Greenbrier shares validates our business model and strategic decisions," Furman continued. "Among other things, our business plan has led to growth in our new railcar market share in North America to 24% of deliveries, double ARII's market share. This is a result of decisions to expand our product offerings in covered hopper cars, tank cars, and other diversified railcar types, with additional capacity within our low cost manufacturing footprint.

"We agree that our stock is a very good value opportunity at present pricing. Greenbrier remains committed to enhancing shareholder value and to maintaining an open dialogue with its shareholders," Furman said.

In a note to clients earlier Tuesday, KeyBanc Capital Markets Inc. analyst Steve Barger said, "With Icahn's current 54.2% stake in American Railcar Industries, Inc. we think this will reignite investor speculation around ARII or Icahn possibly holding discussions around potential strategic opportunities with GBX. If true, we expect investors would view any reasonable offer favorably, as the stock of GBX has significantly underperformed the S&P 500 by 52.3% year-to-date and its peers by 37.4%."