Volkswagen has been locked in a staring contest with Carl Icahn — and Icahn is blinking.
Navistar — a US truck producer whose huge shareholders embrace Icahn and his former protege Mark Rachesky, stated Friday it’s prepared to promote itself to Volkswagen’s truck-making subsidiary Traton for $44.50 a share — a deal valuing the corporate at about $three.7 billion.
That’s up barely from the $43 a share that Traton supplied final month, having sweetened an earlier bid price $35 a share. But it surely’s sorely wanting the $50 a share that Icahn had been asking, in accordance with sources near the talks, and Rachesky was stated to have wished considerably extra.
On Wednesday Traton had despatched a letter to Navistar saying its $43-a-share provide absolutely values the corporate, and represents its “greatest and remaining provide”. Traton added that it might withdraw its provide at 6 p.m. Friday until Navistar stated in writing it was prepared to proceed with discussions with a view to reaching a deal at that value.
Traton’s hard-knuckle announcement had despatched Navistar’s shares tumbling 20 p.c on Wednesday.
Early Friday, Navistar disclosed a letter its chairman Troy Clarke wrote to Traton that had countered with a request for $44.50 a share — a value that had the blessing of each Icahn and Rachesky, in accordance with Clarke.
Navistar shares on Friday have been lately up 21 p.c at $42.94, indicating traders are assured a few deal at $43, however not but satisfied Icahn would get his remaining asking value.
Traton and Navistar have been in on and off deal talks for 4 years and Volkswagen’s Traton is seen as the one pure purchaser for Navistar.