June 20, 2008 / 11:27 AM / 9 years ago

Icahn cuts stake in Greenbrier as ARI deal move fizzles

BANGALORE (Reuters) - Billionaire investor Carl Icahn cut his stake in Greenbrier Cos Inc (GBX.N) to 8.17 percent, after a deal he was negotiating between the railroad equipment supplier and American Railcar Industries (ARII.O) fell through.

Icahn, who had earlier reported a 9.45 percent stake in Greenbrier, also owns almost 54 percent of American Railcar.

In February, Icahn and affiliates had proposed a possible merger of Greenbrier with American Railcar, but did not make an offer or suggest when a merger could take place.

In a regulatory filing earlier this month, Icahn had said that a business combination between Greenbrier and American Railroad was not possible due to some “unresolved issues” and that he might sell off all or some of his stake in Greenbrier.

“Greenbrier, in the last 18 to 24 months, has not done anything that suggests that they would want to be acquired,” analyst Michael Roarke of McAdams Wright Ragen said by phone.

Roarke has a “hold” rating on the stock.

According to the analyst, Greenbrier was on an acquisition spree which does not reflect the behavior of a company that is interested in being acquired.

In April, Greenbrier had acquired the assets of Roller Bearing Industries Inc from SKF USA Inc to expand its replacement parts business.

In March, it closed a deal to buy the assets of railcar parts provider American Allied Railway Equipment Co and its units for $83 million in cash.

Greenbrier, which makes, repairs and refurbishes railroad freight cars, has been posting weak results in the recent past, hurt by falling freight volumes and slowing demand for railcars.

The company has been diversifying its business model in last couple of months to rely less on railcar making and more on its services and leasing businesses.

Shares of Greenbrier were trading down 2 percent at $21.99 in late morning trade on the New York Stock Exchange.

Reporting by Dhanya Ann Thoppil and Sayantani Ghosh; Editing by Gopakumar Warrier

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