Carl Icahn's Christmas gift to me

Carl Icahn selling St. Charles railcar leasing firm for up to $3.4 billion

Excerpt:

Billionaire investor Carl Icahn is selling St. Charles-based American Railcar Leasing LLC, or ARL, to another railroad car management company owned by a Japanese bank.

Icahn Enterprises L.P. announced the agreement to sell ARL to SMBC Rail Services LLC, owned by the Sumitomo Mitsui Banking Corporation. The cash sale price, subject to adjustments, is based on an ARL enterprise value of $2.78 billion and a fleet of 29,000 rail cars.

SMBC will have a three-year option to purchase an additional 4,800 rail cars for $586 million, boosting the total price to $3.36 billion. The deal is expected to close in the second quarter of 2017.

"I have been in the railcar business for over 30 years," Icahn said in a statement. "During that time we have built one of the leading railcar fleets in the world... I am very proud of the business we have built at ARL and am pleased that SMBC Rail Services also sees the tremendous value in this business."

Comment: Note the jump in the price mid-day! I began investing in ARII several years ago. For all ARII posts on CFG click here. Icahn owns 61% of ARII so it's a done deal! SMBC Rail Services is private so this will be a cash deal. The expected close is in the first half of calendar year 2017.

Updated: WSJ article

Carl Icahn: Apple the "modern day [technology] Secretariat"

Sale: Apple Shares at Half Price

Excerpt:

Apple’s ecosystem has come to play an important role in the daily life of Apple users, and while Apple continues to make impressive strides to improve it, the competition falls behind in what is arguably the most important race of this technological era. Analogizing Apple to a modern day Secretariat, as this race continues, the further the distance grows between Apple and Google (and Google’s hardware partners) in the premium device category. Its leading ecosystem of products and services, added to peerless hardware design and quality, differentiates Apple from a simple hardware company. And, with its users consistently upgrading to the newest version of iOS (92% of iOS devices, iPhones and iPads, on iOS 7 prior to the launch of iOS 8), Apple is able to offer its users the most up to date software and service experience, while Android can’t because it’s hindered by relatively high fragmentation among its operating system versions. App developers appreciate the difference, which is why they often choose to make an App for iOS prior to (or instead of) Android. During a recent interview, you referred to Google and only Google as your competition, as no other operating system can gain enough scale in Apps to be relevant. Furthermore, you also described how, in contrast to Apple, Google’s business model relies on advertising, which will increasingly expose products that run Android to serious privacy concerns. Considering all of this, combined with their inability to merge a superior brand, hardware, software, services, fashion and retail stores, Google and its hardware partners will remain disadvantaged in the premium device market. As this is realized, we expect that Apple will gain market share, that those gains will translate into earnings growth in line with our forecasts, and in turn translate into multiple expansion.

Comment: Agreed. We are long on Apple. Icahn image source from Amazon.  Secretariat image source. I imagine in the image above that Secretariat is looking back at Microsoft, Google, IBM, and others!

Clorox and the Pirate

Icahn Fires Back At Clorox Board, Ups Bid To $80

Excerpt:

On Monday, the board of Clorox dismissed a takeover offer from the company’s largest shareholder Carl Icahn, and instituted a shareholder rights plan to dissuade him from increasing his 9.4% stake. The billionaire is not going quietly though, upping his bid Wednesday morning and shooting back at the board’s claims that his initial offer was “neither credible nor adequate.”

Comment: Daphne and the Pirate is a 1916 silent film. Today Clorox trading at $ 75. ALL CAPS is the corporate raider equivalent of pulling out the big guns!