Navistar Moves to Diffuse Takeovers

Navistar International Corp.’s board of directors moved to discourage hostile takeover attempts with a plan that would make the company’s stock available to existing shareholders at a discount.

The preferred share purchase rights plan would come into play when an acquisition or tender offer for more than 15% of the company’s common stock has not been approved by the board of directors. Under such conditions, shareholders would have the right to acquire additional Navistar common stock at a 50% discount.

“The Navistar board of directors believes the rights plan is in the best long-term interests of share owners, because it maintains the board’s ability to effectively represent the interests of the company and share owners in the event of an unforeseen, unsolicited takeover attempt,” said John R. Horne, Navistar chairman.

Although rumors of an offer from Volvo had circulated in March, Navistar spokesmen have consistently refused to comment on the matter. In regards to potential takeovers, a company press release said “the company is not aware of any such attempt at present.”