Oshkosh Truck Corporation (OSK)

[Investorman]

Oshkosh's Enticing Valuation Also Offers A Potentially Lucrative Merger Kicker

by: Morningstar February 12, 2012

We've concluded that Oshkosh (OSK) could be worth between $43 and $46 per share if activist investor Carl Icahn--who owns nearly 10% of both companies' outstanding shares--succeeds in persuading Navistar (NAV) to acquire the specialty vehicle manufacturer. We think Navistar could offer an acquisition premium of between $8 and $11 per share (or between 35% and 45%) above Oshkosh's current market price for the incremental synergies. We see three major categories where Navistar could extract value: manufacturing synergies, truck chassis synergies, and engine synergies.