Back in January, Volkswagen Group’s truck and bus holding company Traton made a $2.9 billion bid to acquire all of the remaining shares in U.S. truckmaker Navistar International Corp, formerly known as International Harvester Company.
At the time, Traton offered $35 per share, which was a 19-percent premium over Navistar’s 90-day volume weighted average price. Despite that, the U.S. company rejected the bid, prompting VW Group’s bean counters to get back to the drawing board.
Well, last week Traton made a revised offer of $43 per share in cash to get all outstanding shares of common stock of Navistar International Corporation not already owned by Traton. That’s a 23 percent increase from the January offer and, if accepted, would result in a $3.6 billion pay day for Navistar shareholders.
See Also: We Spent A Day Driving Trucks And Buses In Sweden, And Learned About VW Group Traton’s Future Plans
Navistar International LT Series
The trouble is the Illinois-based company that makes medium- and heavy-duty trucks and school buses has refused Traton’s bid once again. In a September 14 press statement, Navistar says the offer from the VW Group-owned company “significantly undervalues” it.
“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 $43.00 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,” reads the statement.
This is a clear invitation for Traton to submit a new bid, but it remains to be seen whether that will happen or not. The ball is once again in Traton’s court.
Navistar International LT Series
The VW Group-owned holding company currently holds 16.8 percent of Navistar’s outstanding common shares, acquired in 2016. When announcing the $43 per share offer, Traton CEO Matthias Gründler said: “We continue to believe in the compelling strategic benefits that a complete merger of Traton and Navistar would produce. This is why we are re-emphasizing our interest in the transaction in spite of the Covid-19 pandemic.”
Until now, Traton and Navistar have been collaborating on purchasing and developing electric vehicle technology. The offer comes as the truck sector is under pressure to consolidate and share the costs of developing low-emission technologies.
Navistar International LT Series