American Railcar Industries Spikes On Icahn Confusion

Shares of American Railcar Industries, Inc. ARII spiked higher due to confusion over a Carl Icahn sale announcement.

Icahn announced that his Icahn Enterprises has agreed to sell American Railcar Leasing LLC ("ARL") to SMBC Rail Services LLC, a subsidiary of Sumitomo Mitsui Banking Corporation. Under the deal, ARL is being sold for an enterprise value of $2.778 billion cash and a fleet of approximately 29,000 railcars.

After three years, upon satisfaction of certain conditions, SMBC Rail will have an option to buy, about 4,800 additional railcars. If the conditions are met, the total sale price would come to $3.364 billion.

But, investors have probably mistaken American Railcar Industries for American Railcar Leasing.

“Confusion on ARL and ARII. ARL is 100% privately owned by Icahn. Nothing to do with ARII beyond production and maintenance agreements,” an Oppenheimer analyst told Benzinga.

At last check, shares of American Railcar Industries gained 5 percent to $47.67 after setting a new 52-week high of $51.10.