Ante upped for Traton takeover target Navistar

VW’s trucks arm looks for irresistible pressure on board

Ante upped for Traton takeover target Navistar
Matthias Gründler


Proof, if it is needed, that global corporations walk to the beat of a different economic drum comes as Traton increases its offer for Navistar shares.

VW subsidiary Traton, which controls Scania and MAN amongst other heavy and light commercial vehicle manufacturers, boosts its offer for the owner of International Truck by 23 per cent, from US$35 (A$48) a share to US$43.

Traton already has 17 per cent of its target in an effort to put it on a stronger footing in the US against Daimler and Volvo.

In a note to the US Securities and Exchange Commission, Traton states the offer is a premium of "48 per cent over Navistar’s 90-day volume weighted average price of $29.11 as of September 9, 2020, and a premium of 79 per cent over Navistar’s unaffected price on the day before our January 30, 2020 proposal".

However, it adds the caveat that "the proposal in this letter is an expression of intent only, and shall not create any legally binding obligations.

"No such obligations shall arise unless and until execution and delivery of mutually acceptable definitive documentation by the parties thereto."

However, the message in unmistakeable.

 "We continue to believe in the compelling strategic benefits that a complete merger of TRATON and Navistar would produce," Traton CEO Matthias Gründler says.

"This is why we are re-emphasizing our interest in the transaction in spite of the Covid-19 pandemic."

And VW head of group investor relations Helen Beckermann says it will make extra cash available. 

Read how the expected bid for Navistar was confirmed, here

His firm expects that the independent members of Navistar’s board to review the increased offer, which it pledges to do.  

"Navistar shareholders do not need to take any action at this time, and there is no assurance that any transaction with Traton will occur or be consummated," Navistar, whose board has been holding out for a better offer, says.

But US reports indicate it still may not be enough.

The revised offer comes as Navistar reports third quarter 2020 net loss of US$37 million on revenues on a 45 per cent revenues reduction to US$1.7 billion.

The offer remains subject to due-diligence and a joint merger agreement.

"This merger agreement, which has yet to be worked out, would be subject to final approval by the boards of Traton and Volkswagen AG, and by the board of directors of Navistar and the company’s stockholders," Traton says.


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