TRATON puts brakes on Navistar negotiations; sets Oct. 16 deadline with firm offer of $43 per share

Navistar Tractor on Desert Highway
In a letter addressed to Navistar’s board of directors, TRATON executives held firm to the company’s offer to purchase Navistar’s outstanding common shares for $43 apiece. In addition, TRATON set a deadline of Friday, Oct. 16, for Navistar’s acceptance of the offer.

MUNICH — TRATON SE on Oct. 14 put the brakes on negotiations for a higher price per share for Navistar International Corp.. In January 2020, Navistar received an unsolicited proposal from TRATON to acquire the company for $35 per share for all outstanding shares of Navistar common stock not already owned by TRATON (currently, TRATON holds 16.8% of Navistar’s outstanding common shares).

In September, that offer was upped to $43 per share in cash, a 23% increase that the Navistar board of directors said represented a “starting point” for negotiations.

“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,” Navistar said in a news release.

TRATON this week responded, holding firm on the $43 per share offer and setting a deadline of 6 p.m. CET Friday, Oct. 16, for Navistar’s acceptance in a letter from TRATON’s CEO Matthias Gründler and CFO Christian Schulz, addressed to Navistar’s board of directors and Executive Chairman Troy Clarke.

The letter states that, after performing due diligence on Navistar, TRATON leadership believes that the September offer “fully values the company” and is TRATON’s “best and final offer” (subject to approval by the relevant boards at TRATON and Volkswagen).

“We still believe that this price of $43 per share reflects an extremely attractive premium to Navistar shareholders (a premium of 46% over Navistar’s 90-day volume weighted average price of $29.37 as of Sept. 9, 2020, and a premium of 79% over Navistar’s unaffected price on the day before our Jan. 30, 2020 proposal),” the letter reads. “This proposal will expire and be deemed withdrawn, with no further action on our part, on Friday, 16 October 2020, at 6pm CET, unless prior to that time you have notified us in writing of your willingness to proceed with discussions with a view to entering into a transaction at that price. If that is not the case, we will terminate discussions between the companies.”

TRATON SE is a subsidiary of Volkswagen AG and a worldwide commercial vehicle manufacturer offering light-duty commercial vehicles, trucks and buses. Navistar is a holding company whose subsidiaries and affiliates produce International brand commercial trucks, proprietary diesel engines and IC Bus brand school and commercial buses.

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