The board of directors for Chicago-based Navistar International Corp. has decided not to remove a “poison pill” plan adopted two years ago, designed to protect shareholders against unsolicited takeover tactics – despite shareholder requests to drop the provision.
A majority of shareholders at the company’s annual meeting last February voted in favor of a proposal by GAMCO Investors Inc. to request the board to remove the plan. However, the board, headed by Navistar chairman and CEO John R. Horne, decided not to do so.
“We are in a changing industry that is at the bottom of the business cycle and our stock price is low relative to our long-term prospects,” Horne said in a press statement regarding the board’s decision. “Particularly under these circumstances, Navistar’s board felt the rights plan is in the best long-term interests of shareholders because it maintains the board’s ability to effectively represent the interests of the company and shareholders in the event of an unforeseen, unsolicited takeover attempt.”
The $8.5-billion manufacturer of International mid-range diesel engines, school buses, highway tractors and medium trucks, began rolling out a completely redesigned line of trucks in February following years of engineering and $1-billion worth of investments, especially in new manufacturing equipment.
Yet the rollout came just as sales of new trucks fell precipitously, dropping 55% for Class 8 vehicles and 30% for medium trucks in the last nine months.