Navistar International Corp. (NAV:US) rose the most in more than two months after agreeing to let shareholders Carl Icahn and Mark Rachesky nominate two directors each to the truckmaker’s board.
Shares of the Lisle, Illinois-based truckmaker rose 9.7 percent to $31.99 at the close in New York, the biggest one-day gain since May 3.
Icahn and Rachesky also agreed they won’t run a proxy contest at the company’s annual shareholders meeting in 2014, according to a statement. Navistar last year agreed to add three directors designated by Icahn Partners and Rachesky’s MHR Fund Management LLC. To make room for the fourth board representative, John Pope is retiring as a director immediately, Navistar said in the statement.
The change “likely puts greater control in the hands of these activist investors,” David Leiker, an analyst with Robert W. Baird & Co., wrote in a report.
Rachesky and Icahn are among Navistar’s largest shareholders (NAV:US) and Rachesky is a director (NAV:US). Each investor owns almost 15 percent of Navistar. Chief Executive Officer Troy Clarke, who has led the company since April, is trying to end losses and wants Navistar to concentrate on its main truckmaking business.
Icahn and Rachesky probably will increase their Navistar stakes to almost 20 percent each, Leiker wrote.
Navistar has surged 47 percent this year, compared with an 18 percent increase for the Russell 1000 Index.
To contact the reporter on this story: Bill Koenig in Southfield, Michigan at firstname.lastname@example.org
To contact the editor responsible for this story: Jamie Butters at email@example.com