Billionaire investor Carl Icahn, looking to turn around his money-losing investment in Oskhosh Corp
Icahn, who owns 9.5 percent of Oshkosh's common stock directly and indirectly, sent a letter to the company and its shareholders listing six associates he is nominating: A.B. Krongard, Vincent J. Intrieri, Samuel Merksamer, Jose Maria Alapont, Daniel A. Ninivaggi and Marc F. Gustafson.
Most of the nominees are directly employed by Icahn, or employed by a company affiliated with him.
The move mirrors Icahn's long-standing pattern of using closely aligned directors to pressure management and increase stock prices. Oshkosh and Icahn have been in discussions for several months about his interest in the company.
Oshkosh had set a deadline of November 6 for shareholders to nominate potential directors. Nominees for the company's board will be voted on at the company's annual meeting in early 2012.
Oshkosh's board currently has 13 members, including two newly elected directors that the company added in July, after Icahn disclosed his Oshkosh ownership stake.
In a press release issued after the market closed Friday, Oshkosh said the company's board of directors will consider the nominations in due course.
The Oshkosh board of directors and management team are committed to acting in the best interests of the company, all Oshkosh shareholders and other constituencies, the company said. We have had an open dialogue with Mr. Icahn since we first became aware of his investment in our company.
Icahn has owned nearly 10 percent of the Wisconsin company since mid-year, but his interest in Oshkosh attracted added attention last month when he bought a similarly sized stake in Navistar International Corp
As of Friday, the combined value of Icahn's Oshkosh and Navistar holdings was about $500 million. His move to buy considerable stakes in both companies sparked speculation that he could attempt to steer them into a merger. Icahn has met with Navistar management in recent months.
Navistar and Oshkosh compete in the heavy-truck and engine sectors, as well as for defense contracts.
As with Oshkosh, Icahn is focused on gaining more influence at Navistar, which -- at about $3 billion in market capitalization -- exceeds Oshkosh's value by more than $1 billion. In a filing last month, Icahn said he was interested in talking to Navistar specifically about seats on the board, and on Thursday he reported a slight increase in his Navistar holdings.
Navistar signaled a willingness to cooperate with Icahn, extending the deadline for director nominations by a month -- to November 15 from October 18 -- shortly after Icahn first publicly expressed his interested in a seat.
In a note to investors in late October as merger speculation was rising, JPMorgan equity analyst Ann Duignan said obvious synergies exist between the businesses, and Navistar could consolidate manufacturing operations (at least on the commercial side).
She also said there are likely significant supply chain and headcount reduction opportunities as well as potential sales synergies (and) engine synergies may exist as well.
OSHKOSH UNDER PRESSURE
Oshkosh's stock has recently traded in the $20 range, well below the $28 to $30 range in which Icahn bought.
Shares of Oshkosh closed Friday's session 3.4 percent higher at $21.11.
While Oshkosh is generally considered one of the nation's top defense suppliers, due particularly to its expertise with four-wheel-drive vehicles, it has been under pressure in 2011 as profit and revenue have slumped. The company has struggled to turn a profit on a key military contract, just as sales of a more profitable vehicle it had been building for the military are falling off.
The company's fourth-quarter profit and revenue exceeded analyst expectations, but Oshkosh lowered its outlook for 2012 due to timing issues of sales in its core defense division.
In an interview Tuesday, Oshkosh Chief Executive Officer Charles Szews said the company is seeking to strike more balance in its revenue stream. He is relying on rising sales and profits at its so-called access equipment unit -- which makes aerial-lift work platforms -- as a key driver of future growth in the United States and emerging markets.
Oshkosh also makes a variety of heavy trucks, ranging from fire trucks to cement trucks.
(Reporting by John D. Stoll in Detroit; Editing by Gary Hill, Bernard Orr)