NAV - Why Shares of Navistar Are Soaring Today
Shares of Navistar International (NYSE: NAV) opened up more than 50% on Friday after Volkswagen (OTC: VWAGY) offered to buy the 83% of the U.S. truck manufacturer it does not already own. The shares are trading above the offer price, suggesting investors are hopeful Navistar will eventually be sold for a price above VW's initial offer.
Volkswagen's Traton commercial truck unit before markets opened Friday offered $35 per share for Navistar, a premium of 45% to the target's Thursday close. VW first bought into Navistar in 2016, owns about 16.8% of the company, and had long been expected to eventually try to take full control.
Navistar, a maker of trucks, school buses, engines, and military vehicles, acknowledged receipt of the offer and said its board would review the proposal. VW has long been a consolidator of the global trucking market, acquiring Germany's MAN and Sweden's Scania in recent years, but has been eager to build a foothold in the U.S. market to better compete with rivals Daimler AG and AB Volvo.