Icahn Again Aims At Oshkosh

Posted on October 12, 2012

Investor Carl Icahn has made an offer to buy all the outstanding shares of Oshkosh Corp. for a 21% premium over its closing price of Oct. 10. Already company’s largest single shareholder at 9.45% said his offer of $32.50 a share was conditional on shareholders accepting a slate of directors he planned to nominate to the company’s board. In January, Oshkosh shareholders voted down an Icahn-backed slate of directors.

In a statement, Icahn said that "mismanagement of this company has resulted in a lost decade of shareholder value. Oshkosh needs proactive shareholders to bring a proactive management team together to weather a volatile economy."

Oshkosh recently reported that profits declined more than 35% in the first nine months of its fiscal year, impacted by reduced sales for its military vehicles. In September, the company’s management announced a plan to double annual profit by 2015, helped by cost costs and strong growth at its JLG operation.

Icahn earlier told Reuters he believed Oshkosh should spin off JLG, which it acquired in 2006 for $3 billion.

Oshkosh said its board would advise shareholders of its position on Icahn’s offer within 10 business days and suggested that shareholders not act on the offer until the board has reviewed it. Icahn said that when his tender offer was officially made, it would expire in 45 days. But he added that if at least 25% of Oshkosh’s outstanding shares were sold to him, he would extend his offer.

He added that if he could acquire 50.1% of Oshkosh, "we will demand that the current board accelerate the upcoming annual meeting to allow the prompt election of our slate of directors so that the tender offer can close quickly."

Eli Lustgarten, an analyst who covers Oshkosh for Longbow Research, said of Icahn’s offer, "It's not an unattractive price by any means, but it's surely not a fully valued price."

Days before his Oshkosh offer, Icahn, who is the third largest shareholder at Navistar, increased his influence at that company by getting Navistar to accept an Icahn Partners representative to its board of directors, as well as agree to a third director that would be nominated by Icahn and another large shareholder.

In 2011, Icahn suggested a merger between Navistar and Oshkosh, but it was later rejected by Oshkosh management.