The Lake Oswego, Ore.-based railcar builder in late December rejected a sweetened $543 million bid by American Railcar Industries Inc., saying that the offer "grossly undervalues" its operations. Icahn owns 55% of American Railcar, and had built a stake of 9.99% in Greenbrier.
Icahn has since reduced his stake in Greenbrier, but the target during an earnings call Wednesday said it remains open to a potential deal. Company CEO William A. Furman told analysts that a combination could make sense if it makes both Greenbrier and American Railcar less vulnerable to business cycles.
American Railcar and Greenbrier have similar market capitalizations but Greenbrier is much larger in terms of sales, generating revenue of $443.5 million in the quarter ended Aug. 31, compared to American Railcar's $168.2 million in sales during the quarter ended Sept. 30.
Greenbrier has previously expressed a willingness to do a deal, saying Dec. 19 "the board remains ready and willing to continue discussions with Mr. Icahn" to consider a combination that in the board's view values the company more fairly.
The company early Wednesday reported quarterly earnings of 35 cents per share, 4 cents better than consensus estimates, on better-than-expected $415.4 million in revenue. Greenbrier said it expects to sell about 13,000 units in fiscal 2013, down from 15,000 deliveries last year, but said a better product mix will result in higher average selling prices and should allow earnings and sales to match 2012 levels.
Greenbrier has received orders for more than 4,000 new cars worth more than $430 million since Sept. 1, including more than 1,250 tanker cars that will be used to ship oil from rapidly expanding U.S. oil shale operations. Greenbrier has been seeking to expand its business to the energy industry, a long-time specialty of St. Charles, Mo.-based American Railcar.
"In North America, we continue to ramp up our higher margin tank car production to capitalize on demand from the strong energy market and are sold out of tank car capacity through calendar 2014," Furman said. "At the same time, we are seeing more diversified demand for our products and services in each of the business segments, as well as among railcar types, including automotive, forest products and intermodal."
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