(Reuters) - Billionaire investor Carl Icahn increased his stake in Navistar International Corp (NAV.N) to 13.19 percent, edging closer to the defensive line the embattled U.S. truck and engine maker adopted last month to keep outsiders from taking control.
Icahn disclosed the higher stake in a filing with the U.S. Securities and Exchange Commission on Thursday, the day after MHR Fund Management LLC said it now held 14.95 percent of the company.
That is just shy of the 15 percent stake that would trigger the poison pill defense Navistar adopted last month, which would dilute the stake of any investors holding that large a position.
At Wednesday’s close, shares of the Lisle, Illinois-based company had lost 39 percent of their value this year as it struggled to win regulatory approval for a new generation of diesel engine.
Last week the company said it was changing course and adopting elements of a technology that most of its major rivals use. Investors were nonplussed by the move, particularly since the new style of engine will not be ready until next year.
Shares of Navistar were down less than 1 percent at $22.90 in early trading.
Navistar shareholders got another dose of bad news on Tuesday when engine maker Cummins Inc (CMI.N) slashed its full-year sales forecast, warning that demand for heavy trucks was weakening in the United States and abroad.
“The market has been weak in North America, and now are slowing in China and Brazil,” said Robert W. Baird & Co analyst David Leiker. “There are a couple of tough quarters ahead for heavy trucks.”
Icahn and MHR did not immediately return calls seeking comment; nor did Navistar.
The company has been facing pressure from investors to sell itself or change its engine strategy as it struggled for the past year to contain costs of developing a new type of diesel engine for heavy trucks.
MHR, an investment company founded and run by Mark Rachesky, acquired a 13.6 percent stake in Navistar in June, edging out Icahn’s 11.87 percent holding.
Icahn, known for shaking up companies and advocating sales, pushed for a merger between Navistar and rival Oshkosh Truck Corp (OSK.N) late last year, but Oshkosh shareholders voted down a slate of directors he had nominated for its board.
After Icahn announced his stakes in Navistar and Oshkosh (OSK.N) last year, he said he would seek board seats at each company.
Navistar avoided a contested election with a deal to change its board structure so that directors were elected for one-year terms. As a result, Icahn agreed to drop his slate of nominees.
The 39 percent slide in Navistar shares this year has been far steeper than the declines at its peers. Oshkosh is down 6 percent; Cummins, 5 percent; and Paccar Inc PACR.O, 4 percent.
Reporting by Scott Malone in Boston with Bijoy Koyitty in Bangalore; Editing by Lisa Von Ahn