Carl Icahn’s unsolicited $3 billion bid for Oshkosh Corp. [OSK] undervalues the company and should be rejected, Oshkosh’s board of directors wrote in a letter to shareholders last Friday.
Icahn Enterprises [IEP], Oshkosh’s largest shareholder with just under a 10 percent stake in the truck maker, earlier this month launched a tender offer of $32.50 for each share of stock. The offer is good until Dec. 3 but can be extended.
While Icahn has been complaining that Oshkosh has been slow to bolster its value–and is urging the company to divest its JLG division that makes access equipment for construction and other industries–Oshkosh’s board said the tender offer is inadequate and “he has stated publicly that the value of Oshkosh is in excess of that prices.”
Separately on Friday, Oshkosh reported its fourth quarter financial results, with net income more than doubling to $78.9 million, 86 cents earnings per share (EPS), from $37.5 million (41 cents EPS) a year ago. Sales dipped 2 percent to just under $2.1 billion from just over $2.1 billion a year ago.
Operating income in the defense segment fell 13 percent to $61 million while sales decreased 19 percent to $953.7 million. Defense income fell on the lower sales.
The Access Equipment segment that includes JLG increased operating income 71 percent to $59.5 million while sales rose 16 percent to $716 million.
The Oshkosh board has also adopted a shareholder rights plan, frequently called a “poison pill” defense aimed at preventing a hostile take over of the company.