ISS backs some Icahn nominees in Oshkosh proxy fight

Wed Jan 18, 2012 1:31pm EST

A military vehicle passes by the Oshkosh plant in Wisconsin October 12, 2011. REUTERS/Darren Hauck

A military vehicle passes by the Oshkosh plant in Wisconsin October 12, 2011.

Credit: Reuters/Darren Hauck

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(Reuters) - Carl Icahn has won an ally in his proxy battle with the management of truck and defense vehicle maker Oshkosh Corp (OSK.N) as a leading corporate governance advisory firm said it would support three of Icahn's nominees to the Oshkosh board.

Institutional Shareholder Services (ISS) cited the nominees' larger strategic vision for the company in deciding to support Icahn's nominees, Icahn Enterprises LP said on Wednesday.

Last week, independent proxy advisory firms Glass Lewis & Co and Egan-Jones Proxy Services recommended that their clients vote for all of the Oshkosh director nominees at the company` s 2011 annual meeting of shareholders on January 27.

Oshkosh said in a statement on Wednesday that it believes the ISS report endorsing Icahn's nominees is "fundamentally flawed," and that it is convinced Icahn's slate of nominees, if elected, would simply carry out the investor's "self-serving agenda."

Shares of Oshkosh were 1.6 percent higher at $24.64 in afternoon trading on the New York Stock Exchange.

Oshkosh is locked in a proxy battle with Icahn ahead of the January 27 shareholder meeting, and the two sides have been filing a series of proxy materials for shareholders in recent weeks.

Among other proposals, Icahn has called on Oshkosh to explore alternatives for its JLG aerial lift business and to allow the company to participate in defense industry consolidation as both a buyer and a seller.

Oshkosh has said, however, it undertook a comprehensive strategic review of all of its business in the past year with the counsel of outside financial advisers, after which it concluded that splitting off businesses like JLG would destroy shareholder value.

Oshkosh bought JLG Industries for $3.2 billion in cash in 2006. Since then, the company's entire market value has fallen to about $2.2 billion even as JLG's importance has increased because of growing sales and headwinds in the defense business.

JLG is at the bottom of the industry cycle and Oshkosh said that selling the business at a time when the construction industry is set for a recovery fails to create any long-term value for the company.

Icahn has nominated a slate of six directors and last week filed a 47-page presentation for shareholders questioning the company management's plans and ability. Oshkosh, for its part, has questioned the qualifications of Icahn's director nominees.

The relationship between Icahn and Oshkosh has been under a spotlight since the investor bought about a 10 percent stake in Navistar International Corp (NAV.N), an Oshkosh competitor. Icahn has said the two companies need to explore synergies.

(Reporting By Nick Zieminski and Soyoung Kim in New York; Editing by Gerald E. McCormick, Tim Dobbyn and Steve Orlofsky)

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