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Carl Icahn Drops Oshkosh (OSK) Bid

 December 04, 2012 10:28 AM

(By Balachander) Billionaire investor Carl Icahn has dropped a tender offer for shares of Oshkosh Corp. (NYSE: OSK), a maker of specialty vehicles and vehicle bodies.

Icahn, who owns more than 9 percent of Oshkosh, made the $32.50 a share offer for the company in October.

The tender offer for Oshkosh shares expired on Monday, with roughly 22 percent of the shares tendered, which was lower than the 25 percent threshold Icahn had sought.

"We have said in a number of communications to shareholders since the outset of this tender offer that we would not extend our offer unless at least 25 percent of the outstanding shares are tendered in the offer," said Icahn. "Therefore, we are returning all tendered shares and we will not extend the offer."

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Activist investors such as Icahn acquires significant stakes in target companies, and seeks board change, divestiture or spin-off of operations to enhance shareholder value.

Wisconsin-based Oshkosh, which makes heavy duty vehicles under Oshkosh, JLG and Pierce brands, reported a 36 percent drop in earnings through the first nine months due to declines at its military-vehicle unit.

In August, Icahn urged Oshkosh to spin off JLG, which it acquired in 2006 for $3 billion.

Icahn on Friday said Oshkosh's board refused to allocate any meaningful capital to repurchase shares during fiscal 2012 when the stock traded at an average price of $22.34 per share. "Yet after we tendered for the company, and the shares traded up over $30.00 per share, the company then determined repurchasing shares might be a good idea," he said.

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"We strongly believe that the board's new found capital allocation strategy is disingenuous, with its sole purpose being to try to defeat our tender offer," Icahn said last week.

Last Thursday, Oshkosh urged its shareholders to ignore Carl Icahn's last minute plea to support what Oshkosh calls a highly conditional, inadequate and opportunistic offer.

Shares of OSK dropped 4.39 percent to trade at $28.78 on Tuesday. Over the past year, the stock has been trading between $18.49 to $31.65.

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