Volkswagen‘s trucks subsidiary Traton on Thursday hiked its buyout offer for U.S. peer Navistar by over a fifth to $43 per share.
The German automaker made a $35 per share offer in January when it was attempting to boost its stake in Navistar beyond the 16.6% it purchased in 2016 but failed to secure a majority stake. Analysts at Jefferies have said Navistar is worth no less than $45 per share.
Volkswagen said Traton’s recent offer valued the shares in Navistar it doesn’t already own at around $3.6 billion.
“We believe it’s in Traton’s interest to move quickly on NAV (Navistar) as NAFTA truck market recovers,” Jefferies said on Thursday, referring to North American markets.
Navistar said it would evaluate the revised offer.
“Navistar’s Board of Directors and management team are committed to exploring all avenues to maximize value. Consistent with its fiduciary duties, the Board will carefully review the revised proposal from Traton,” Navistar said.
Like the auto industry, the truck sector is also having a hard time consolidating to share the costs of developing low emission technologies. Traton and Navistar have been working together on purchasing and electric vehicle technology.
But Traton saw it difficult to win over Navistar’s largest shareholder, financier Carl Icahn, whose fund owns 16.9% of Navistar’s shares. Icahn and two other activist funds, Mark Rachesky’s MHR Fund Management and Gabelli Funds, together control 40% of Navistar’s shares.
Volkswagen said on Thursday it would give funds to finance Traton’s increased offer with the aim of Traton becoming the only owner of Navistar.
