American Railcar Industries, Inc. Issues Open Letter to The Greenbrier Companies, Inc.
December 19 2012 - 3:46PM
American Railcar Industries, Inc. (ARI) today issued the following
open letter to Mr. William A. Furman, President and Chief Executive
Officer, of The Greenbrier Companies, Inc.:
December 19, 2012 William A. Furman President and Chief
Executive Officer The Greenbrier Companies, Inc. One Centerpointe
Drive Lake Oswego, Oregon 97035
Dear Bill:
I am writing on behalf of the Board of Directors of American
Railcar Industries, Inc. and its Chairman, Carl C. Icahn.
We are very confused regarding the press release Greenbrier
issued yesterday in response to American Railcar's offer to acquire
Greenbrier for $20 per share in a negotiated transaction. As you
know, our representatives have had friendly and constructive
discussions with you and your team during the past few weeks
regarding strategic opportunities involving American Railcar and
Greenbrier. Last weekend, your investment banker contacted me and
encouraged American Railcar to make an offer to acquire Greenbrier.
He stated that the Greenbrier Board would seriously entertain an
offer of between $20 and $22 per share, and there was substantial
support on the Greenbrier Board for a transaction in that price
range. As a result, shortly thereafter, American Railcar made an
initial offer of $20 per share, payable in cash, in a negotiated
transaction. I personally read the language of the offer and our
required legal disclosure to your investment banker and asked that
it be communicated to Greenbrier management and to you (Bill
Furman) personally before it was publicly disseminated. I was
assured by your banker that it had been. We would never have made
the offer had we not believed that we had your support and the
support of a substantial number of directors for a transaction in
the price range we discussed. That is why we are extremely
perplexed by your press release. It is completely inconsistent with
what we were led to believe by your investment banker.
We also strongly disagree with your assertion that American
Railcar's $20 per share offer "grossly undervalues" Greenbrier. On
the day prior to the disclosure of American Railcar's ownership
interest in Greenbrier, the company's stock closed at $13.95 per
share. Moreover in the company's last earnings release, you
disclosed that fiscal 2013 railcar deliveries are forecasted to
decline by 13% to 23% from 2012 levels and Greenbrier's stock price
declined by 23% during the days following the release. But even if
you believe that American Railcar's $20 per share offer is
inadequate, why would your representative encourage us to make the
offer in the first place? Moreover, why would you respond to our
offer by issuing a press release rather than engaging in good faith
negotiations, particularly since we have
repeatedly indicated that we would only pursue a
friendly, negotiated transaction?
At this stage, to avoid further confusion, we would like to make
several things perfectly clear. As you know from our prior
discussions, American Railcar's Board has no interest in selling
our company to Greenbrier at a "modest premium" to its market
value, as you alluded to in your recent press release. However,
American Railcar is willing to acquire Greenbrier at a price of $22
per share, payable in cash, in a negotiated transaction. The offer
price represents a 57% premium to the closing price of Greenbrier's
stock on the day before American Railcar disclosed its ownership
interest in the company and a 46% premium to the volume weighted
average price of Greenbrier stock during the 30 trading day period
prior to such date. American Railcar's offer represents full
value for Greenbrier and will not be increased under any
circumstances.
We have spent the past several weeks discussing strategic
opportunities involving American Railcar and Greenbrier, and it is
time that we bring this process to a conclusion. We will hold our
proposal open until 2:00 p.m. (New York City time) on Friday,
December 21st. If by such time Greenbrier's Board provides notice
to us that it wishes to proceed with a transaction at $22 per
share, American Railcar will initiate its due diligence immediately
and concurrently commence negotiations on a definitive merger
agreement. If Greenbrier's Board does not wish to proceed on this
basis, we will move on to other endeavors and abandon any efforts
to complete a transaction. All we ask for is a "yes" or "no"
answer. We do not wish to have a counter-offer.
We look forward to your response. In the meantime, please feel
free to call me with any questions or to discuss this matter
further.
Sincerely,
Daniel A. Ninivaggi President & CEO Icahn Enterprises
L.P.
About ARI
ARI is a leading North American designer and manufacturer of
hopper and tank railcars. ARI leases railcars manufactured by the
Company to certain markets. In addition, ARI repairs and
refurbishes railcars, provides fleet management services and
designs and manufactures certain railcar and industrial components.
ARI provides its railcar customers with integrated solutions
through a comprehensive set of high quality products and related
services.
Forward Looking Statement Disclaimer
This press release contains statements relating to ARI's
expected financial performance and/or future business prospects,
events and plans that are "forward-looking statements" as defined
under the Private Securities Litigation Reform Act of 1995.
Forward-looking statements represent the Company's estimates and
assumptions only as of the date of this press release and are
subject to known and unknown risks and uncertainties that could
cause actual results to differ materially from the results
described in or anticipated by ARI's forward-looking
statements. Other potential risks and uncertainties relating
to the Company and its business are described in the Company's
filings with the Securities and Exchange Commission. ARI expressly
disclaims any duty to provide updates to any forward-looking
statements made in this press release, whether as a result of new
information, future events or otherwise. More information about
American Railcar Industries, Inc. is available on its website at
www.americanrailcar.com.
CONTACT: Dale C. Davies
Michael Obertop
PHONE: 636.940.6000
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