Billionaire investor Carl Icahn proposed that Oregon-based Greenbrier, the biggest U.S. railroad-flatcar maker, hold talks on a possible...
Billionaire investor Carl Icahn proposed that Oregon-based Greenbrier, the biggest U.S. railroad-flatcar maker, hold talks on a possible tie-up with his American Railcar Industries. The news pushed Greenbrier stock up 19.2 percent, the most since 2000.
Icahn, American Railcar’s majority holder, didn’t make an offer or suggest the structure of any combination, according to a U.S. regulatory filing Monday. He bought a 9.5 percent stake in Lake Oswego-based Greenbrier, the filing showed.
Greenbrier “has said they’d be willing to sell,” said Paul Bodnar, a Cleveland-based analyst for Longbow Research. “So I don’t think they’re going to kick and scream if the price is right.”
Greenbrier declined to comment beyond confirming Icahn’s overture. “The board is committed to acting in the best interests of Greenbrier shareholders and other constituencies,” the company said in a regulatory filing.
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Greenbrier stock jumped $3.99 to $24.75 Monday. American Railcar rose $2.94, or 16.6 percent, to $20.62, its biggest gain since going public in 2006.
A tie-up would unite companies with strengths in different types of rail equipment amid a slump in rail-car orders. “There’s a decent strategic fit between the two companies,” Morgan Keegan analyst Arthur Hatfield said.
“Greenbrier has historically been very strong in the intermodal equipment market, and that’s where American Railcar has not been strong,” Hatfield said.
So-called intermodal cargo is moved by a combination of train, truck and ship, with the rail leg of the trip typically using flatcars.
St. Charles, Mo.-based American Railcar’s main products are hopper cars for grain and tank cars that transport liquids.
Icahn purchased his Greenbrier stake of 1.5 million shares from Jan. 8 to Jan. 25, according to the Securities and Exchange Commission filing. That would make him the fourth-largest shareholder, according to Bloomberg data.
Icahn, 71, owns 54 percent of the outstanding shares in American Railcar, according to data compiled by Bloomberg. He said in the filing that he acquired the Greenbrier shares “in the belief that they are undervalued” and that he may buy more.
Greenbrier reached a 52-week low of $16.03 on Jan. 23. Icahn paid $17.60 to $19.54 a share, according to his filing.
Icahn is an activist shareholder who led a successful fight to win a seat on the board of movie-rental giant Blockbuster, whose chairman and chief executive left soon afterward. He also has pushed for changes in recent years as a shareholder at other companies, including Time Warner and Motorola.
Information from The Associated Press is included in this report.