Volkswagen AG’s heavy-truck business boosted its bid for Navistar International Corp., offering to buy the rest of the U.S. manufacturer for $3.6 billion.
Traton SE increased its offer to purchase the portion of stock it doesn’t already own to $43 a share, up from $35 a share offered in January, according to a statement. Bloomberg News reported last week that the VW division was seeking to restart negotiations this month to win over Navistar’s management and main shareholders, which include billionaire investor Carl Icahn.
Navistar shares surged as much as 20% to $43.08 in New York trading. Traton fell 3.8% to 17.92 euros in Frankfurt.
By acquiring Lisle, Illinois-based Navistar, VW would secure a strong position in the U.S. heavy-truck market and step up its challenge to Daimler AG and Volvo AB. VW said in a separate statement that it will provide funds for the financing of Traton’s increased offer.
“A strategic buyout of Navistar remains an eventual outcome with a competing bid unlikely,” Christopher Ciolino, an industrials analyst for Bloomberg Intelligence, wrote in a report. VW’s minimal presence in the North American truck market and Navistar’s strong dealer network may justify an even higher offer, he said.
Bid for Diligence
Traton already owns almost 17% of Navistar, trailing only Icahn, according to data compiled by Bloomberg. Its third-largest shareholder is Mark Rachesky, the founder and chief investment officer of MHR Fund Management, with a 16.3% stake.