Activist Investors Boost Navistar Holdings

Activist investors Carl Icahn and Mark Rachesky have separately increased their stakes in Navistar International Corp. this week to levels close to the 15% limit that would trigger the poison-pill provision the truckmaker set in place last month.

Icahn tells the U.S. Securities and Exchange Commission he hiked his stake in the Lisle, Ill.-based company on Wednesday to 13.2% from 11.9%. Rachesky, a former Icahn protege, discloses he raised his holding earlier this week to 14.95% from 13.6%.

Navistar's stock has plummeted 38% this year as bad news piled up about recalls, warranty expenses, slowing sales of heavy-duty trucks and problems caused by its 13-liter diesel engine that doesn't meet American emission standards.

Separately, Franklin Resources Inc. notified the SEC this week that it boosted its Navistar position to 18.8% in the second quarter of 2012 from 12.4% on March 31. The San Mateo, Calif.-based mutual fund group is the company's largest stockholder.

Navistar's board in June adopted a plan to prevent "coercive takeover tactics" by rapidly multiplying the amount of stock in shareholder hands if an investor crosses the 15% threshold. The additional shares could make a hostile buyout prohibitively expensive. The company says that Franklin Resources is not affected by the new rule because it increased its holding before the poison pill was adopted.

The board has the power to revoke the plan at any time, thus allowing it to sell Navistar to a friendly buyer.

A German newspaper reported last month that Volkswagen AG might buy a stake in the company to bolster its North American presence. Fiat Industrial SpA, which owns commercial vehicle maker Iveco, also expressed interest in building its foothold in the U.S. truck market.