Second Activist Investor Buys Navistar Stake

Activist Investor Mark Rachesky's MHR Fund Management LLC has acquired a 13.6% equity holding in Navistar International Corp., thus becoming the company's largest shareholder.

Billionaire Carl Icahn Icahn hiked his stake in the Lisle, Ill.-based maker of trucks and diesel engines earlier this month to 11.9% from 10%. Rachesky, Icahn's former chief investment officer, has clashed with his former boss since co-founding his own investment firm in 1996.

Fund manager Mario Gabelli, a longtime Navistar shareholder, said in early June he had boosted his stake incrementally to 6.2%.

Rachesky's filing with the U.S. Securities and Exchange Commission says he bought Navistar stock because it is undervalued. Shares have fallen 29% since March to $29.95 on Friday. Rachesky also says he may discuss the company's business with management.

Navistar shook up management 10 days ago after an unexpected $153 million loss in the fiscal second first quarter ended April 30. Last week a U.S. appeals court threw out a regulatory ruling that has allowed the company to continue selling 13-liter diesel engines that don't comply with American 2010 emission standards.