LOS ANGELES Greenbrier Cos. has turned down a second, sweetened takeover deal from billionaire investor Carl Icahn, with the two sides continuing to trade barbs amid apparent skepticism on Wall Street that a deal, which could create North Americas largest rail car builder, will succeed.
Greenbrier rejected a $22-per-share acquisition offer worth $597 million from Icahn-controlled American Railcar Industries Inc. (ARII), calling it "unacceptable." But the Lake Oswego, Ore.-based rail car builder said that it remains "ready and willing to continue discussions" about a potential tie-up.
However, Greenbrier stock continued to weakentrading at $16.19 per share on the New York Stock Exchange Friday afternoonnormally taken as a sign that Wall Street has little confidence a deal will come off.
A spokesman for St. Charles, Mo.-based ARII said that the company had "no comment" on Greenbriers snub of the second offer, which was up from an original $20 per share, worth $543 million (amm.com, Dec. 19).
Daniel A. Ninivaggi, president and chief executive officer of Icahn Enterprises LP, had given Greenbrier president and chief executive officer William A. Furman until 2 p.m. Dec. 21 to give a "yes or no answer" to ARIIs improved offer, insisting in an open letter that Icahn would otherwise "abandon" its attempt to pursue a tie-up.
However, Greenbrier fired off its rejection considerably before this deadline, maintaining that it "cannot support a transaction that undervalues" Greenbrier or "overvalues American Railcar."
Prior to making the initial offer of $20 per share, Ninivaggi said in the letter that he was "encouraged" by Greenbriers banker that the company would "seriously entertain" an offer between $20 and $22 per share, for which there was "substantial support" on the board. But Greenbrier disputed Ninivaggis claim, maintaining that "at no point" during its discussions with ARII did it encourage an offer in that range.