* Greenbrier says sweetened offer undervalues company
* Says combination with American Railcar could be beneficial
* Remains ready and willing to continue discussions
* Takeover battle was revived after nearly 5 years
Dec 20 U.S. railcar maker Greenbrier Companies
Inc has yet again rejected a bid from American Railcar
Industries Inc, controlled by activist investor Carl
Icahn, saying the sweetened offer still undervalued the company.
Greenbrier's latest snubbing intensifies a takeover battle
that was revived by Icahn after nearly five years. Icahn tried
to merge the companies in 2008 but dropped the bid later that
year, saying a combination was not possible due to "unresolved
On Wednesday, American Railcar increased its offer by 10
percent to $22 per share, valuing Greenbrier at $597 million,
after Greenbrier rejected an earlier $20 per-share bid.
"American Railcar's conditional proposal to acquire the
company for $22 per share is unacceptable and not in the best
interests of Greenbrier stockholders," Greenbrier said in a
statement late on Thursday.
Greenbrier said that at no point during the discussions with
Icahn did the company or its advisers invite or encourage
American Railcar to make an offer to acquire Greenbrier for a
price in the range of $20-$22 per share.
"Greenbrier has made clear to Icahn and his representatives
that a price range of $20-$22 per share would not be acceptable
to the company," it said.
Greenbrier, however, said it continues to believe that a
combination with American Railcar could be beneficial to both
companies and their stockholders, and remains ready and willing
to continue discussions.
While rejecting American Railcar's initial offer of $20 per
share, Greenbrier had earlier said it had repeatedly told Icahn
that the company would in turn be interested in buying American
Railcar for a "modest premium."
Icahn Enterprises LP controls 55.6 percent of
American Railcar, according to its most recent filing.
Shares of Greenbrier have risen 30 percent since Icahn
reported a 9.99 percent stake in the company last month that
made him its largest shareholder. Greenbrier shares closed down
12 percent at $18.16 on Thursday.
The offer price is still at a discount to the $30-range the
Greenbrier stock was trading at when Icahn attempted to merge
the companies in 2008.
American Railcar's offer is also below Greenbrier's
intrinsic value of $28.67 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
The Lake Oswego, Oregon-based Greenbrier grew rapidly in
2011 as strong demand for railcars to transport crude oil and
sand for hydraulic fracturing enabled it to ramp up production
and raise prices.
But the company has been struggling with moderating demand
this year from oil companies.