The truckmaker added Vincent Intrieri, an Icahn representative, and investor Mark Rachesky as directors. They will replace Eugenio Clariond and Steve Klinger, the Lisle, Illinois-based company said in a statement. The truckmaker said it agreed to add a third director to be designated and agreed upon by Icahn and Rachesky and their affiliates. The new directors will stand for election next year.
Last month in a letter to Navistar’s board, Icahn said he wanted four board seats made available to shareholders “immediately” and that he would proceed with “protracted litigation and a proxy fight” if necessary to protect his investment. Icahn has pressured Navistar’s new management, led by former Textron Inc. (TXT) CEO Lewis Campbell, after the company had a net loss of $241 million for the first three quarters of its fiscal year.
“I am glad to have reached an agreement that provides strong shareholder representation on the board and look forward to working diligently with the board to enhance value at Navistar,” Icahn said in the statement.
The truckmaker ousted Dan Ustian as CEO in August after an inquiry from regulators about its accounting and disclosures and reversed course on an engine strategy that had failed to meet 2010 federal emission standards. Icahn, who holds 14.9 percent of Navistar, said large shareholders weren’t consulted about management changes, including Ustian’s departure.
“They’re on the inside now instead of on the outside,” David Leiker, an analyst with Robert W. Baird & Co., said in an interview. “This is following a fairly predictable path, but it’s hard to say what the outcome ultimately will be.”
Navistar’s four largest investors hold about 50 percent of the shares, including a stake of almost 15 percent held by Rachesky, according to data compiled by Bloomberg.
Navistar rose 6.1 percent to $22.50 at 10:24 a.m. New York time after reaching $22.77 for the biggest intraday gain since Sept. 6. The shares dropped 44 percent this year through Oct 5.
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