Navistar Grants Board Seats to Activist Investors

Navistar International Corp. has averted a proxy fight by giving shareholders Carl Icahn and Mark Rachesky three seats on the company's board of directors.

Icahn harshly criticized Navistar management in an open letter to the board last month. He demanded that the company immediately grant four board seats to its largest shareholders.

The billionaire investor, who owns 14.9% of Navistar's equity, threatened legal action or a proxy fight if necessary. The board fears a proxy battle because its four largest investors own about half the company.

Rachesky, a hedge fund manager with a 14.95% Navistar stake, and Icahn representative Vincent Intrieri will replace existing directors Eugenio Clariond and Steve Klinger. Icahn and Rachesky will jointly designate the third director.