IC Bus parent Navistar adds two Icahn allies to its board
BY AP Wire Service
Tuesday, October 09, 2012
10/09/12 at 7:12 AM
LISLE, Ill. (AP) - Heading off a proxy war, heavy truck, school bus and engine company Navistar is adding a colleague of activist investor Carl Icahn and a former protege of his to its board.
Shares of Navistar International Corp. added $1.60, or 7.5 percent, to finish at $22.81 on Monday. The stock has lost about 40 percent of its value in 2012.
Navistar - parent of the IC Bus plant at Tulsa International Airport - said Monday that Mark Rachesky and Vincent Intrieri are now board members. Intrieri works for Icahn Capital LP. Rachesky runs MHR Fund Management LLC, a hedge fund that increased its stake in Navistar over the summer. Icahn Capital and MHR each own a nearly 15 percent stake in Navistar.
The Lisle-based company will add one more new director, to be approved by both Icahn and Rachesky, to its board.
Rachesky and Intrieri replace Eugenio Clariond and Steven Klinger, who have agreed to retire from the board. Clariond, retired CEO of steel producer IMSA S.A., was a director since 2002. Klinger, the former president and chief operating officer of packaging company Smurfit-Stone Container Corp., was a director since 2008.
The third new director will replace an as-yet unnamed board member.
As part of the agreement to appoint Rachesky, Intrieri and the third director, Navistar said Icahn and Rachesky have agreed that they won't force a proxy fight at its 2013 annual shareholders meeting, and that they will support the board's nominees.
Analyst Stephen Volkmann of Jefferies & Co. said the activist investors now have a significant, but not controlling, position on Navistar's board.
"We believe it was highly likely that activists would have prevailed in a proxy fight, so the fact that these shareholders would now forgo the opportunity to control the company suggests they have concluded the current management plan may be an easier path to value," he wrote in a client note.
The analyst maintained a "Buy" rating and $45 price target.
Icahn has pressured Navistar to make changes. Last month he told the company that it should give shareholders more of a say in the decision-making process and allow them to appoint at least four board members.
Navistar has struggled this year amid uncertainty about whether its Class 8 engine, used in the largest commercial trucks, would get Environmental Protection Agency approval. The company said in July that it was in talks with the EPA on a plan that would allow it to continue shipping trucks while it makes a transition to a new emission-reducing technology that will bring it into compliance with EPA requirements. The new technology is expected to be available beginning early next year. Navistar said then that the new plan would add to product development costs.
Original Print Headline: Navistar adds Icahn allies to its board
The IC Bus plant in northeast Tulsa is a unit of Navistar International Corp., which said Monday that two allies of activist investor Carl Icahn are being added to its board of directors. MIKE SIMONS / Tulsa World