After a day of market rumors, RailAmerica Inc. on Tuesday announced that it is in discussions for a possible sale of the company.
The Jacksonville-based railroad company said its board of directors has engaged Deutsche Bank Securities Inc. to help it evaluate strategic alternatives, and that it “is engaged in preliminary discussions with third parties regarding a potential sale of the company.”
RailAmerica also said it would not comment further unless an agreement is reached.
RailAmerica owns and operates 45 short-line railroads in 28 states and Canada.
New York-based investment firm Fortress Investment Group controls a majority of RailAmerica’s stock, so Fortress would have to agree for a sale to occur.
Fortress acquired RailAmerica in 2007 and then took it public with a stock sale in 2009, but Fortress still owns 59.6 percent of the company’s shares.
Fortress moved RailAmerica’s headquarters from Boca Raton to Jacksonville after it acquired another Jacksonville-based railroad in 2007, the Florida East Coast Railway.
Fortress still owns Florida East Coast and it is operated separately from RailAmerica.
The rumors of a possible sale of RailAmerica were sparked by a story on the website of Trains magazine, which said Fortress was interested in selling its stake. That story also said Warren Buffett’s Berkshire Hathaway Inc. is a potential buyer.
Berkshire Hathaway acquired the Burlington Northern Santa Fe railroad in 2010.
Rumors of the sale discussions, which were not confirmed by RailAmerica until after the market closed, sent the company’s stock up as much as $2.15 to $23.70 on Tuesday afternoon. That was near the stock’s record high of $23.90 reached last month.
The stock closed at $22.13 Tuesday.
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