Big Trucking Deal: VW Might Gain Stake in Navistar (NAV); Shares Higher
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Following last Thursday's surprise second-quarter 2012 loss from Navistar (NYSE: NAV) and the subsequent stock drop and gap fill last Friday, shares are on the move again Monday following some positive chatter issued over the weekend.
According to Reuters, paraphrasing the Financial Times Deutschland, German auto-giant Volkswagen might be eying Navistar for a potential stake. The stock is about 50 percent lower from its annual high of $58.50 last July, leaving the military and commercial truck maker with a market cap just north of $2 billion.
The second-quarter loss stemmed mainly from a warranty charge tied to engines manufactured between 2010 and 2011.
Volkswagen is no stranger to the trucking industry: Reuters noted the company's ownership of Scania in Sweden and Germany's MAN SE. Volkswagen doesn't have a significant trucking presence in the U.S. yet.
One of the hurdles Volkswagen might face is activist investor Carl C. Icahn. With an 11.87 percent stake in Navistar (recently raised), Icahn might look for stiffer terms and may not vote in favor should a deal be proposed. Icahn pushed for Navistar to merger with Oshkosh (NYSE: OSK) back in late 2011 and into early 2012, though nothing ever came to fruition.
After opening sharply higher this morning, Navistar shares are now trading around $28.25, down about 0.4 percent from Friday's close.
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According to Reuters, paraphrasing the Financial Times Deutschland, German auto-giant Volkswagen might be eying Navistar for a potential stake. The stock is about 50 percent lower from its annual high of $58.50 last July, leaving the military and commercial truck maker with a market cap just north of $2 billion.
The second-quarter loss stemmed mainly from a warranty charge tied to engines manufactured between 2010 and 2011.
Volkswagen is no stranger to the trucking industry: Reuters noted the company's ownership of Scania in Sweden and Germany's MAN SE. Volkswagen doesn't have a significant trucking presence in the U.S. yet.
One of the hurdles Volkswagen might face is activist investor Carl C. Icahn. With an 11.87 percent stake in Navistar (recently raised), Icahn might look for stiffer terms and may not vote in favor should a deal be proposed. Icahn pushed for Navistar to merger with Oshkosh (NYSE: OSK) back in late 2011 and into early 2012, though nothing ever came to fruition.
After opening sharply higher this morning, Navistar shares are now trading around $28.25, down about 0.4 percent from Friday's close.
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