Oshkosh Corp. has sent a proxy card to shareholders recommending they ignore an effort by billionaire investor Carl Icahn to install his own board members as he pushes for a merger with one of the company's key rivals.
Icahn recently nominated six associates to be on the board of the Wisconsin maker of trucks, construction lifts and defense vehicles. In a letter to the company's shareholders last week asking for support for his nominations, he also voiced strong support of a merger between Oshkosh and Navistar International Corp.
Icahn owns nearly 10 percent stakes in both companies. Oshkosh shareholders will weigh in on the battle between Icahn and the company's management and board at the January 27 annual meeting in Oshkosh.
In a proxy card sent to shareholders and signed by Oshkosh Chief Executive Charles Szews, the company said "your board and management team are successfully executing Oshkosh's strategy to position the company for the future and create value for all shareholders."
In the following pages, the company repeated its operating strategy and laid out several metrics that indicate recent success in the business.
The proxy card was dated December 20 and filed with the Securities and Exchange Commission on Wednesday.
Oskhosh's outreach to shareholders contrasts the message coming from Navistar management, which has lent vocal support to a collaboration with Oshkosh. Navistar — bigger than Oshkosh in terms of revenue and market capitalization — has said it sees potential synergies with its rival in the defense and commercial truck sectors.
Navistar Chief Executive Dan Ustian also said on Tuesday during the company's fourth-quarter earnings call that he sees opportunities to supply Oshkosh with engines for trucks and other key truck components.
Navistar shares surged on Tuesday as the company's results exceeded expectations, but gave back most of those gains on Wednesday as the stock fell 5.2 percent to close at $36.90. Oshkosh shares traded up slightly on Wednesday after a strong Tuesday performance, closing at $21.99.
Oshkosh is not the only party to raise questions about Icahn's strategy. Earlier in the week, Owl Creek Asset Management founder Jeffrey Altman filed a disclosure saying he had "concerns" about a merger. Altman said Navistar needs to "demonstrate the ability to derive significant value from synergies."
Icahn's own overture to Oshkosh shareholders indicates the investor strongly supports a merger.
"The Icahn Parties believe there may be significant synergies between Oshkosh and Navistar International Corporation and that shareholders of both companies could benefit from these synergies and the Icahn Parties would be supportive of a merger," the letter said.
"The Icahn Parties believe that synergy driven consolidation will be a primary method for defense contractors to drive earnings and cost savings in the years ahead."
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