Update: Navistar Rejects Traton’s New Bid

Navistar International Corp. issued a statement from its board of directors regarding the revised proposal from Traton SE – and it could be summed up as “closer, but not there yet.”

“Navistar’s Board of Directors, after careful consideration with the assistance of its financial and legal advisors, has unanimously concluded that while Traton’s revised proposal of $43 per share significantly undervalues the company and substantial synergies from a combination, it does represent a starting point for further exploring the possibility of a transaction,” Navistar said in a statement. “Traton has developed a strong strategic relationship with the company in recent years, and, in light of the 23% increase in their proposal, the board believes the best way for Traton to appreciate the true value of a potential combination is to allow it to conduct due diligence and engage in further synergy discussions with the company.”

In late January, Traton, the former Volkswagen Truck & Bus AG, made an offer to purchase the outstanding shares of Navistar that it does not own for $35 per share in cash, which would be about $2.9 billion. Traton already owns 16.8% of Navistar, the manufacturer of International brand trucks, which it purchased in 2016 for approximately $256 million.

Last week, Traton upped the ante to $43 per share in cash or approximately $3.6 billion.

Navistar said there is no assurance that any transaction with Traton will occur or be consummated and the company “does not intend to make any additional comments regarding the proposal unless and until it is appropriate to do so, or a formal agreement has been reached.”