Reddy Ice Holdings Inc. (NYSE:FRZ) may face problems with its proposed buyout after concerns surfaced that GSO Capital Partners may not be able to obtain the financial needed from Morgan Stanley to complete the $1.1 billion transaction. Perhaps equally troubling is the low $21 million breakup fee that would give GSO Capital little reason to try and salvage the deal if things went bad. Shareholders also remain divided on whether the company would best be sold or kept under current management.

The news only adds to other bad news that has already clouded the deal. The management of Reddy Ice was hit by shareholder protests against the price spearheaded by players like Noonday Asset Management and Shamrock Activist Value Fund. Meanwhile, GSO announced that it would need more time to secure the financing necessary to complete the transaction given the current market conditions. And problems only compounded as the company missed its July earnings targets as the CEO and COO announced that he was leaving the company.

Unfortunately, there is little left to support a $25 share price short of a merger actually being consummated. It will be interesting to see whether or not GSO and the company can complete the transaction, otherwise shareholders will be left with an underperforming company that can’t sell itself and lost its CEO and COO. There appears to be only problems left with this stock now…

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