Feb. 4 (Bloomberg) -- Billionaire investor Carl Icahn proposed that Greenbrier Cos., the biggest U.S. railroad-flatcar maker, hold talks on a possible tie-up with his American Railcar Industries Inc. Greenbrier rose the most since 2000.

Icahn, American Railcar's majority holder, didn't make an offer or suggest the structure of any combination, according to a U.S. regulatory filing today. He bought a 9.5 percent stake in Lake Oswego, Oregon-based Greenbrier, the filing showed.

A tie-up would unite companies with strengths in different types of rail equipment amid a slump in railcar orders. St. Charles, Missouri-based American Railcar's main products are hopper cars for grain and tank cars that transport liquids.

Greenbrier ``has said they'd be willing to sell,'' Paul Bodnar, a Cleveland-based analyst for Longbow Research, said in an interview. ``So I don't think they're going to kick and scream if the price is right.''

Greenbrier declined to comment beyond confirming Icahn's overture. ``The board is committed to acting in the best interests of Greenbrier shareholders and other constituencies,'' the company said in a regulatory filing.

Greenbrier jumped $3.99, or 19 percent, to $24.75 at 4:02 p.m. in New York Stock Exchange composite trading. It was the biggest gain since October 2000. American Railcar jumped $2.94, or 17 percent, to $20.62 in Nasdaq Stock Market composite trading for its biggest gain since going public in 2006.

Bodnar rates Greenbrier as a ``buy'' and American Railcar as ``neutral.'' Greenbrier reported sales of $1.2 billion for 2007, while American Railcar said revenue for the first nine months totaled $536 million. It hasn't posted full-year results.

January Purchases

Icahn purchased his Greenbrier stake of 1.5 million shares from Jan. 8 to 25, according to the U.S. Securities and Exchange Commission filing. That would make him the fourth-largest shareholder, according to Bloomberg data. The biggest Greenbrier investor is Jeffrey Gendell, general partner of Greenwich, Connecticut-based Tontine Associates.

Icahn, 71, owns 54 percent of the outstanding shares in American Railcar, according to data compiled by Bloomberg. He said in the filing he acquired the Greenbrier shares ``in the belief that they are undervalued'' and that he may buy more. Greenbrier reached a 52-week low of $16.03 on Jan. 23. Icahn paid $17.60 to $19.54 a share, according to his filing.

Greenbrier Chief Executive Officer William Furman was notified that Icahn is ``interested in having discussions'' regarding a ``possible business combination,'' according to the filing, which didn't give details.

`Decent Strategic Fit'

``There's a decent strategic fit between the two companies,'' Morgan Keegan Inc. analyst Arthur Hatfield said in an interview. ``Greenbrier has historically been very strong in the intermodal equipment market, and that's where American Railcar has not been strong.''

So-called intermodal cargo is moved by a combination of train, truck and ship, with the rail leg of the trip typically using flatcars. Hatfield, based in Memphis, Tennessee, rates Greenbrier and American Railcar as ``market perform.''

Standard & Poor's Rating Services said it ``will monitor future developments'' and may change its rating of American Railcar depending on how a tie-in proceeds.

Combining with Greenbrier would require additional debt, S&P analyst Gregoire Buet wrote in a note. S&P rates American Railcar and Greenbrier debt BB-, three steps below investment grade.

Railcar orders in 2007's third quarter, the most recent period for which data are available, fell 62 percent from a year earlier as U.S. railroads weathered a drop in freight demand caused by weak home and auto sales, according to the Railway Supply Institute, a trade group that includes railcar makers.

Railroad freight traffic, as measured by carloads moved, fell 2.5 percent in 2007, the Washington-based Association of American Railroads said.

To contact the reporter on this story: Angela Greiling Keane in Washington at agreilingkea@bloomberg.net

Last Updated: February 4, 2008 17:57 EST