Greenbrier rejects Icahn’s $543 million offer as not good enough

Greenbrier Cos Inc rejected a $543 million (334 million pounds) bid from activist investor Carl Icahn’s American Railcar Industries Inc , saying the offer is not good enough, and expressed interest in buying American Railcar instead.

Greenbrier said it is willing to continue discussions with Icahn, and that it believes combining the two companies would offer substantial synergies and be beneficial to shareholders of both firms.

American Railcar on Tuesday offered $20 per share for Greenbrier, reviving a nearly five-year old plan to combine the companies.

Greenbrier said in a statement that in previous conversations, Icahn talked about acquiring the company at a price of between $20 and $22 per share in cash.

“The Greenbrier board of directors believes a price range of $20-$22 per share is inadequate, grossly undervalues the company and is not in the best interests of Greenbrier stockholders,” the company said in a statement.

Greenbrier did not say what it would consider a fair price for the company.

The company’s intrinsic value is $28.56 as measured by Thomson Reuters StarMine. The StarMine model is a measure of how much a stock should be worth currently when considering expected growth rates over the next 15 years adjusting for analysts’ systematic biases.

While rejecting the offer, Greenbrier also said it has repeatedly told Icahn that it would be interested in buying American Railcar for a “modest premium.” American Railcar has a market capitalization of $733.7 million, according to Thomson Reuters data.

Icahn Enterprises LP controls around 55.6 percent of American Railcar, according to its most recent filing.

Greenbrier said it is willing “to consider any combination of Greenbrier and American Railcar.”

Greenbrier grew rapidly in 2011 when strong demand in the energy sector increased deliveries nearly fourfold, but energy demand has since moderated and its growth has slowed.

Greenbrier reported a quarterly profit in November that was less than half of what analysts expected and forecast a weak 2013.

During Icahn’s failed bid to merge the two companies in 2008, Greenbrier’s shares were trading at the $30-range. They slid as much as 30 percent after it was withdrawn.

Icahn reported a 9.99 percent stake in Greenbrier last month, making him its largest shareholder, and Greenbrier shares have risen 36 percent since then.

Greenbrier and American Railcar, make, repair and refurbish railroad freight cars.

railroad

Source : au.news.yahoo.com

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