Billionaire investor Carl Icahn bought nearly 15% of the 10.7 million shares issued Thursday (Oct. 25) by Navistar International Inc. to ease concerns about the commercial truck and engine maker running out of money.
Fox Business reported that five of Icahn’s investment funds bought 1.6 million shares, paying $18.75 a share, or a total of $29.9 million, according to a filing late Thursday with the U.S. Securities and Exchange Commission (SEC).
The additional shares raised Icahn’s Navistar holdings by 15.5%. That’s the same percentage Navistar’s total share count increased by with the additional 10.7 million shares. As a result, Icahn’s stake in Navistar stays unchanged at about 14.9%, just under the 15% threshold to trigger Navistar’s antitakeover plan.
The company’s board enacted a so-called poison-pill plan in June when activist investors such as Icahn and his former protege Mark Rachesky began buying large blocks Navistar’s depressed stock. Both Icahn and Rachesky had 14.9% shakes in Navistar before the company’s stock offering Thursday.
Earlier this month, Navistar’s directors agreed to add Rachesky and a representative for Icahn to the company’s board. Icahn and Rachesky also were given the authority to select another director who both men agree on. In exchange for representation on Navistar’s board, Icahn and Rachesky agreed to refrain from nominating an alternative slate of directors at the company’s 2013 annual meeting. The deal defused a potential showdown over control of the company between the incumbent board and activist investors.
Carl Icahn increased his stake in Navistar International Corp to 13.19% as of July 11, up from his previous stake of 11.87%.
Reuters reported the move comes a day after MHR Fund Management LLC — largest shareholder in the U.S. truck and engine maker — raised its stake to 14.95%. On June 20, Navistar adopted a poison pill aimed at keeping outsiders from gaining a stake of 15% or more.
Icahn, a billionaire investor known for shaking up companies and advocating sales, had pushed for a merger between Navistar and rival Oshkosh Truck Corp. early this year.
Navistar, parent to Monaco RV LLC, has been struggling for the past year to contain costs of developing a new type of diesel engine for heavy trucks, and has seen its shares lose about half their value in the meantime.
The company, facing pressure from investors to sell itself or change its engine strategy, said last week it was developing a new engine which is expected to be ready early next year.
Navistar International Corp. today (Nov. 15) announced that it entered into an agreement with investor Carl Icahn and certain of his affiliates to submit a proposal at its 2012 annual meeting of shareholders to “destagger” the board to elect directors on an annual basis.
According to a press release, with this agreement, Icahn agreed not to seek board representation at the company’s 2012 annual meeting and agreed to vote in favor of the company’s nominees for election.
“Navistar’s board and management team are committed to acting in the best interests of the company and all its shareholders, and we believe that the annual election of our directors, without a staggered board, further strengthens our corporate governance practices,” said Dan Ustian, chairman, president and CEO of Navistar, a maker of trucks, buses and Monaco brand RVs. “We also are pleased to have reached an agreement with Mr. Icahn that includes his support for our Board nominees for election at our upcoming shareholders meeting.”
If approved by the shareholders, Navistar will begin the annual election process starting with the class of three directors up for election at the annual meeting. Instead of three-year terms, each nominee would be elected to a one-year term with a majority of the board being elected to a one-year term at the 2013 meeting and all nominees being elected on an annualized cycle as of the 2014 session.