Reddy Ice: Shamrock wants self-tender instead of deal with GSO Capital

By Lisa Kerner

Charlotte, N.C., July 16 - Reddy Ice Holdings, Inc. investor Shamrock Capital Advisors Inc. said it opposes the planned $35.25 per share acquisition of the company by GSO Capital Partners.

Instead, Shamrock wants Reddy to begin a self-tender for about 15% of its outstanding shares at $33 per share by incurring $110 million of new debt.

The GSO transaction is "at the wrong time, for the wrong price," according to Shamrock's Michael J. McConnell in a July 16 letter to Reddy's board of directors.

Shamrock, with a 5.4% stake in Reddy, expressed "dismay, that, with the building blocks now in place for significant earnings growth, this board is seeking to deprive shareholders of the opportunity to realize those benefits and recognize full value for their shares."

According to Shamrock, Reddy has "dramatically grown" its ice revenue and free cash. In addition the investor believes "sharper pricing opportunities exist and are achievable."

"Not only is this the wrong time to sell Reddy, as the company has just lowered its guidance due to unseasonably cold weather, the $31.25 per share price offered by GSO is grossly inadequate," Shamrock said, noting that its valuation of the Dallas ice making company is in the range of $42 to $44 per share.

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