LOS ANGELES — Carl Icahn has thrown in the towel on his bid to create the largest North American rail car builder, unloading most of his stock in Greenbrier Cos.
A U.S. Securities and Exchange Commission (SEC) filing revealed that the billionaire investor—who was looking to combine his majority-controlled American Railcar Industries Inc. (ARII) with Lake Oswego, Ore.-based Greenbrier—has sold 1.79 million shares of Greenbrier common stock, dropping his ownership interest to 3.41 percent from an earlier 9.9 percent.
Spokesmen for Greenbrier and St. Charles, Mo.-based ARII couldn’t be reached for comment.
Greenbrier had turned down ARII’s sweetened bid of $22 per share, up from an initial offer of $20 per share. Daniel A. Ninivaggi, president and chief executive officer of Icahn Enterprises LP, had said in a letter to Greenbrier president and chief executive officer William A. Furman that ARII would drop its takeover attempt if it didn’t get a positive response to the second offer (amm.com, Dec. 21).
Icahn sold the stock at an average price of $16.30 per share, according to the SEC filing, lower than any day since Nov. 12, the day prior to the disclosure of Icahn’s 9.9-percent investment in Greenbrier, when the stock closed at $13.95 per share, according to an amended SEC filing. A previous filing gave the price at $15.41 per share, a mistake that the amended Icahn filing attributed to a typographical error.
In a post-mortem note to investors, Peter Nesvold, equity analyst for Jeffries & Co. Inc., New York, said that while Icahn’s final $597-million offer for Greenbrier reflected "fair value" for the company, it fell short on other counts. Among these were Icahn leaving himself an "out," since his offer wasn’t actually firm but would have allowed him to walk away from the deal after performing due diligence. Greenbrier’s board of directors was unlikely to approve a deal tinged with such "uncertainty," Nesvold said.
A successful acquisition by ARII would have moved the combined company ahead of Dallas-based Trinity Industries Inc. as the largest North American manufacturer of rail cars, according to earlier estimates.