Navistar International Corp. [NAV] yesterday responded with “disappointment” to an open letter issued Sept. 9 by activist stockholder Carl Icahn that called the company “a poster child for abysmal business decisions and poor corporate governance.”
“Navistar maintains an ongoing dialogue with its shareholders, and appreciates their input and views,” the company statement said. “As such, after a year of dialogue, we are extremely disappointed that Mr. Icahn has chosen to pursue his unproductive tactics of threats, attacks, and disruption rather than continuing constructive engagement, particularly at this important time for Navistar. Rest assured, the Board and management have a clear path forward and are focused on executing on their plan and delivering value to shareholders.”
Icahn owns nearly 15 percent of the stock, and wants the board to make four seats on the board available immediately. If not, he wrote in his open letter, he would proceed, if necessary, with protracted litigation and a proxy fight, “to protect my investment and the interest of all shareholders.”
Icahn’s letter said Navistar would soon receive a demand under Delaware Corporation Law seeking “access to corporate documents and Board proceedings at Navistar.”
Icahn’s concerns ranged from a market share decline from 25 percent in 2010 to 15 percent in the most recent quarter, to a share price decline from almost $60 per share at the beginning of 2011 to under $25 per share, to a “gold plated” corporate headquarters that cost more than $100 million.
Similar concerns led to a thwarted effort by Icahn to place nominees on the Board of Directors of Oshkosh Corp. [OSK] in January (Defense Daily, Jan. 9,11,30).