Volkswagen has entered a star competition with Carl Icahn – and the billionaire flashes.
Navistar – the manufacturer of the international brand for big rig trucks, whose main shareholders include Icahn and his former protégé Mark Rachesky – basically reached an agreement on Friday to sell to truck subsidiary Traton von. For USD 44.50 per share Volkswagen will sell what the company estimates at about $ 3.7 billion.
This is a slight increase over the $ 43 per share Traton offered last month after sweetening an earlier bid of $ 35 per share. However, the $ 44.50 per share offering is very short of the $ 50 a share Icahn wantedAccording to sources close to the conversations. As the Post has already reported, Rachesky had once looked a lot more.
The haggling came to a head this week when Traton sent a letter to Navistar saying his $ 43 per share offer was “the best and most definitive.”
Traton, a major Navistar investor who controls two directorships, said he would leave the property at 6 p.m. Friday unless Navistar has agreed in writing to close a deal at that price.
Traton’s tricky announcement dropped Navistar’s shares 20 percent on Wednesday, bringing Icahn and Rachesky to their knees.
Navistar and Traton announced Friday that Traton will buy the Navistar stock, which it does not already own, for $ 44.50 per share, subject to due diligence and final approval by the board of directors and shareholders. Navistar stock closed 22.8 percent, or $ 8.10 per share, to $ 43.52.
The handshake agreement ends with four-year on-and-off talks between the two truck manufacturers. Volkswagen’s Traton is considered the only natural buyer for Navistar as it is the only world-leading truck manufacturer that does not yet have a US operation that it desperately desires.
Navistar’s international line has a share of around 14 percent of the US truck market, which enables Traton to compete with the Freightliner trucks from Daimler-Chrysler and the Mack trucks from Volvo without having to start up from scratch .
Icahn and Rachesky will make money on the deal, though not nearly as much as they probably hoped when they bought Navistar stock about eight years ago.
Icahn bought into Navistar in 2011 when the stock was around $ 35 per share, and Rachesky in 2012 when the stock was in the mid-20s.
Since September 2011, when Icahn announced he had bought Navistar stock, the stock has risen 28 percent. The S&P 500 is up 179 percent over the same period.
Icahn’s other investments in the automotive sector have deteriorated, including this year when his roughly $ 2 billion investment in Hertz went up in smoke after the car rental company filed for bankruptcy. The pandemic depressed Hertz’s sales and left it unable to pay its debts.
Icahn’s 20-year investment in Federal-Mogul has also had a success. In 2018, the billionaire helped sell the auto parts maker to Tenneco for $ 5.4 billion, giving him a 15 percent stake in the parent company.