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Navistar Gives In to Icahn to Avoid Proxy Fight

The company will give the investor representation on its board


Struggling truck manufacturer Navistar International (NYSE:NAV) has managed to prevent a proxy battle with activist investor Carl Icahn.

The company has replaced two members of its board, adding investor Mark Rachesky, who controls about 15% of Navistar shares, and Vincent Intrieri, who will represent Icahn. A third member, chosen by Icahn and Rachesky, will be added later, Bloomberg noted.

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Navistar’s move came after Icahn, who owns 14.9% of Navistar shares, sent a letter to the board in September threatening a proxy fight in addition to a lawsuit if the company didn’t provide investors with four seats on its board.

Icahn has been sharply critical of Navistar’s management. The company has posted $241 million in losses so far this year, while its shares have fallen 40%. In August, former CEO Dan Ustian stepped down after the company abandoned a long-running effort to get government approval for a new engine.

In June, Navistar’s board approved a “poison pill” strategy to defend against a potential takeover.

The three boards seats appear to have at least temporarily mollified Icahn, who issued a statement applauding the decision and pledging to work with the board to increase the company’s value.

Shares of Navistar fell fractionally in Tuesday morning trading.

Article printed from InvestorPlace Media, http://investorplace.com/2012/10/navistar-gives-in-to-icahn-to-avoid-proxy-fight/.

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