Investor Carl Icahn yesterday said he plans to make a tender offer for the outstanding shares of Oshkosh Corp.’s [OSK] common stock in a deal that would be valued at nearly $3 billion.
Oshkosh said it will advise its shareholders of the company’s position of the unsolicited offer within 10 business days. In a press release Oshkosh pointed out that Icahn was unsuccessful in a bid earlier this year to get any of his nominees on the company’s board of directors (Defense Daily, Jan. 30).
Icahn’s $32.50 per share cash offer represents a 21 percent premium above the closing price of Oshkosh’s stock on Wednesday, the day prior to the offer announcement. Icahn said his offer is conditional on the election of his nominees to the Oshkosh board at its upcoming annual shareholder meeting early next year.
Icahn said that Oshkosh has essentially done nothing–such as seriously explore strategic alternatives—to increase its stock price to match the value of its assets.
“It is clear to me that management has taken a passive attitude to the future of this company, willing to sit back and watch what happens to the defense, housing and construction industries, hoping for a positive outcome and reduced competition,” the activist investor said in a statement. “They have suggested that shareholders should be willing to tie a defense contractor and a construction equipment company together, and wait another four years to see if the defense business will be viable on its own, or if it will become an anchor and drag down the entire company.
Currently Icahn, through his holding company Icahn Enterprises, LP [IEP], has a 10 percent stake in Oshkosh having acquired most of those shares in 2011 (Defense Daily, July 6, 2011). If he is successful in receiving tenders for 40.1 percent more shares, Icahn will demand that Oshkosh’s board accelerate the date of the shareholder meeting so that his nominees can be elected and the tender offer quickly closed.
The company’s last annual shareholder meeting was in January. The tender offer will have an expiration date of 45 days once it begins.
Oshkosh makes trucks for the commercial, civil and military markets. So far this year its sales are up but its earnings are well off last year’s results due to declines in its defense segment.
Oshkosh’s stock yesterday closed up nearly 8 percent, or $2.05, to $28.90. Barron’s cites an analyst report from Bank of America that says Icahn’s offer is low. The bank’s analysts suggest the stock is worth at least $35 to $38 per share and above $40 as part of a takeover, Barron’s says.
Goldman, Sachs and Co. is Oshkosh’s financial adviser on the offer by Icahn.