MHR Controls Some 13.6% of Navistar

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Navistar shares shifted higher this morning after activist MHR Fund Management reported a massive holding that makes it the largest shareholder of the auto-parts company.

MHR controls some 13.6% of Navistar, around 9.3 million shares, and is run by Mark Rachesky. The new stake sets up a wild race between Rachesky and his former mentor, Carl Icahn, who recently added to his stake Navistar, raising it to 12%.

The two men spent several years fighting over control of Lions Gate studios. Icahn came out the loser.

Shares of Navistar rose 8.2% to $30.10.

The battle for Navistar comes after two consecutive quarters of unexpected losses. It’s just days after the U.S. Court of Appeals threw out a Environmental Protection Agency rule that allowed Navistar to sell non-compliant engines if it paid a fine. And last week, S&P downgraded Navistar to B+, four notches below investment grade; Fitch placed Navistar’s BB rating on “watch negative.”

Navistar recently lowered its annual profit forecast, to break-even to $2 a share.

Source: Forbes/ Abram Brown

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