* American Railcar says willing to offer $22/share
* American Railcar's previous offer was for $20/share, or
* Greenbrier says $20-$22 per share grossly undervalues firm
* Greenbrier expresses interest in buying American Railcar
* Icahn controls American Railcar, owns 10 pct of Greenbrier
(Adds analyst, investor comments; updates shares)
By Sagarika Jaisinghani
Dec 18 American Railcar Industries Inc,
controlled by activist investor Carl Icahn, said it was willing
to raise its offer for Greenbrier Cos Inc after being
snubbed by the smaller railcar maker.
American Railcar said it could increase its offer by 10
percent to $22 per share, valuing Greenbrier at $597 million.
But a deal at that price is unlikely as Greenbrier has
already deemed such an offer inadequate in its response to
American Railcar's first bid, which revived Icahn's five-year
old plan to merge the companies.
"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 late on Tuesday.
American Railcar's shares were down 5 percent, while
Greenbrier was quoted at $20.61 in after-market trading,
indicating that investors were skeptical of a deal going
An offer price of between $23 and $26 per share would still
add meaningfully to American Railcar's earnings, Longbow
Research analyst Matthew Brooklier wrote in a client note.
American Railcar's offer, however, is at a discount to the
$30-range Greenbrier shares were trading at when Icahn attempted
to merge the companies in 2008. He dropped the bid later that
year, saying a combination was not possible due to "unresolved
A REVERSE BUY
While rejecting American Railcar's initial offer of $20 per
share, Greenbrier said it had repeatedly told Icahn that it
would be interested in buying American Railcar for a "modest
The company said it was willing to continue talks with
Icahn, and that combining the two rivals would offer substantial
synergies and benefit shareholders.
Greenbrier did not say what it would consider a fair price
for the company. The company did not respond to calls seeking a
American Railcar's second-largest shareholder, Advisory
Research, said it would be interested in selling its shares to
Greenbrier if it got a "compelling" offer.
"With the appropriate acquisition premium you'd have to get
(an offer) above the mid $40's," said Matthew Swaim, the
managing director of the firm, which has an 8.6 percent stake in
American Railcar's intrinsic value is $54.47 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'
Icahn Enterprises LP controls around 55.6 percent of
American Railcar, according to its most recent filing. The
company has a market capitalization of about $734 million.
Greenbrier grew rapidly in 2011 when strong demand in the
energy sector increased deliveries nearly fourfold. But energy
demand has since moderated and the company's growth has slowed.
It reported in November a quarterly profit that was less
than half of what analysts had expected.
Icahn reported a 9.99 percent stake in Greenbrier last
month, making him its largest shareholder, and Greenbrier shares
have risen more than 30 percent since then.
American Railcar said on Wednesday it would terminate its
offer if Greenbrier did not respond by 2 pm Eastern Time on Dec.
(Reporting by Tej Sapru and Sagarika Jaisinghani in Bangalore;
Editing by Muralikumar Anantharaman, Chris Gallagher and