In an amended 13D filing on Reddy Ice Holdings, Inc. (NYSE: FRZ), 5.4% holder Shamrock Activist Value Fund said GSO Capital Partners' $31.25/share buyout of the company substantially undervalues the business. The firm said their DCF shows that the intrinsic value of Reddy Ice is ~$42-$44 per share.
Shamrock proposed: Pursue a leverage recapitalization, Raise $110M of debt, Do a self-tender for 3.3M shares (~15% of outstanding shares) at $33 per share.
The firm said:
Allow some shareholders to exit at a higher valuation than the GSO offer, while allowing shareholders who appreciate the long-term potential of the business to have the opportunity to capture a significantly higher return.
Shamrock paid, on average, about $28 per share for its stake. The 11.6% return is clearly not enough for the firm.