Icahn, ex-protege fuel trucking-merge drama

This big-rig truck merger could be headed for a collision course.

Carl Icahn and other key investors in trucking giant Navistar are willing to sell it to a Volkswagen subsidiary for around $50 a share, valuing the maker of International semi trucks at a whopping $5 billion, sources told The Post.

The 84-year-old billionaire could, however, find himself locked in a boardroom battle with his former protege Mark Rachesky — a major Navistar shareholder who may demand an even higher bid, according to people close to the talks. Whatever happens, insiders say, Icahn is readying himself for battle with plans to push through a deal at what he believes is a reasonable price.

Volkswagen’s truck-manufacturing subsidiary Traton — which last month raised its offer for Navistar to $43 a share, up from a pre-pandemic overture of $35 a share in January — is conducting diligence on Navistar and is expected to finish by the end of this week, sources close to the situation said.

Traton — which sees Navistar as Volkswagen’s ticket into the US’s lucrative long-haul trucking business — is expected to once again increase its $43-a-share offer by mid-October, although it is unclear by how much, sources said.

Navistar shares on Friday closed at $44, indicating investors are expecting Traton to deliver a sweetened bid.

Last month, Navistar, the biggest independent maker of trucks and truck parts in the US, said Traton’s latest offer “significantly undervalues” the business, although the bid was enough to rekindle merger talks.

While Icahn is willing to accept around $50 a share, according to two sources familiar with his thinking, he alone does not control the situation.

Volkswagen’s Traton unit is Navistar’s biggest shareholder, with a 17 percent stake. Not far behind are Icahn and Rachesky, with each owning about 16 percent of the company. Traton’s two directors on the 11-member board are locked out of the merger talks, while Icahn controls three board seats. Another three are controlled by Rachesky’s MHR Fund Management.

It’s unclear which way the remaining three directors, including Executive Chairman Troy Clarke, are leaning, insiders said.

“Rachesky has the utmost confidence in Troy’s ability to maximize value for Navistar shareholders and get board approval irrespective of Icahn’s views,” a person familiar with the deal insisted, referring to Clarke.

As The Post previous reported, Rachesky in January suggested to fellow board members that Navistar was worth more than $70 per share. If Traton agrees to pay around $50, Icahn believes he can corral enough Navistar investors to vote for the deal, sources said.

Still, one insider says Rachesky — who has a history of bad blood with Icahn since he left his former boss’s firm after a six-year stint there in the 1990s — may choose to dig in.

“An offer at $50 would lead to a very tough discussion,” a source close to the situation said.

The looming battle, which pits two equally strong factions against each other in a conflict that could endanger a deal, “appears unusual and possibly situationally unique,” said Bruce Goldfarb, chief executive of Okapi Partners, a proxy soliciting firm that isn’t involved in the Navistar talks.

“Usually, boards move forward on sales when there is some consensus,” Goldfarb said. “All directors will need to be mindful here that investors and litigators will be watching their moves carefully.”

Reps for Icahn, Rachesky and Navistar all declined to comment.

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