-- Carl Icahn has offered to buy all the outstanding shares of specialty
vehicle manufacturer Oshkosh Corp. for $32.50 per share.
-- We are placing our ratings on Oshkosh, including the 'BB' corporate
credit rating, on CreditWatch with negative implications.
-- We will resolve the CreditWatch listing when more information
regarding the proposed transaction becomes available. We will then assess
Oshkosh's financial policy and the impact of any potential transaction on its
On Oct. 12, 2012, Standard & Poor's Ratings Services placed its ratings on
Oshkosh, Wis.-based Oshkosh Corp., including the 'BB' corporate credit rating,
on CreditWatch with negative implications.
The CreditWatch placement reflects uncertainty regarding the leverage profile
for Oshkosh and its strategic direction following reports that the company has
received a buyout offer from Carl Icahn for $32.50 per share, valuing the
company at close to $4 billion including debt.
As we had previously noted, Carl Icahn and related entities had disclosed
beneficial ownership of about 9.5% of Oshkosh stock in July 2011, through a
combination of shares and call options. Although unsuccessful in electing any
of his six nominees in January 2012 following a proxy fight, the Icahn-led
ownership and potentially heightened shareholder focus caused some uncertainty
as to the strategic direction of the company and had the potential to result
in a more aggressive financial policy.
Yesterday's announced tender offer for Oshkosh's shares has increased risks
related to our assessment of the company's financial risk profile, which we
currently assess as "significant" because of uncertainty as to how the
proposed transaction will be financed and the potentially more aggressive
policy an Icahn-owned entity could pursue.
Further, possible strategic actions could result in a change in our assessment
of the company's business risk profile, which we currently view as
"satisfactory." For instance, Icahn has recently indicated a desire to have
Oshkosh spin off its aerial work platform segment, which represents a
significant portion of revenues and profits. We expect the unit to represent
more than half of operating profit in fiscal 2013.
We will resolve the CreditWatch listing when more information regarding the
proposed transaction becomes available. We will then assess the company's
financial policy and the impact of any potential transaction on the company's
capital structure or operating strategy.
Related Criteria And Research
-- Liquidity Descriptors For Global Corporate Issuers, Sept. 28, 2011
-- Criteria Methodology: Business Risk/Financial Risk Matrix Expanded,
May 27, 2009
-- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008
Ratings Placed On CreditWatch Negative
Corporate Credit Rating BB/Watch Neg/-- BB/Stable/--
Senior Secured BBB-/Watch Neg BBB-
Recovery Rating 1 1
Senior Unsecured BB/Watch Neg BB
Recovery Rating 4 4