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Navistar Has Until Friday to Accept Traton Takeover Bid

Navistar shares dropped as VW's trucking arm set a deadline for its takeover offer.
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Shares of commercial diesel truck and parts manufacturer Navistar International  (NAV)  fell nearly 20% Wednesday after Traton SE said that its takeover bid offer expires at 6 pm. Central European Time Friday.

Traton SE is the heavy truck division of German automaker Volkswagen  (VLKAY)

Traton says that its offer of $43 per share, which was increased in September from the company's initial offer of $35 per share in January, "reflects an extremely attractive premium to Navistar shareholders."

The offer is a 46% premium over the stock's 90-day, volume weighted $29.37 average share price. The company's market cap was about $3.6 billion when it was trading above $40 per share.

The offer is also 79% above Navistar's unaffected price on the day before it received a takeover offer.  

Navistar was down 18.8% to $36.10 in afternoon trading on Wednesday following the release of Traton's letter to its board of directors today. 

A request for comment from Navistar was not returned in time for publication. 

Traton is looking to expand its business and challenge Daimler AG and Volvo AB for dominance in the diesel and heavy truck sector, according to reports. 

"We continue to believe in the compelling strategic benefits that a complete merger of Traton and Navistar would produce,” Traton CEO Matthias Grundler said in a statement in September when the company upped its offer. “This is why we are re-emphasizing our interest in the transaction in spite of the Covid-19 pandemic.”

Navistar reported that revenue for the 2020 fiscal third quarter ended July 31, totaled $1.7 billion, down 45% from the year-ago quarter.