By Matt Doiron
While many Wall Streeters are taking things slow in the summer, Carl Icahn has been into some nasty battles. Last Wednesday, it was reported that MHR Capital - run by Mark Rachesky, a former employee of Icahn's - has added to its stake in Navistar International Corporation (NAV) after overtaking Icahn as the largest shareholder of Navistar last month. Icahn has since responded by upping his ownership in Navistar to 13.2%, now at over 9 million shares.
In June, the activist investor reported owning 8.1 million shares in the heavy truck maker, up from 7.3 million at the end of March (check out Carl Icahn's other holdings). This still is behind MHR's nearly 15% stake in Navistar, and Icahn is unlikely to surpass that level due to takeover defense provisions adopted by Navistar.
The two fund managers had previously dueled over control of Lions Gate Entertainment Corp. (LGF). In early 2010, Icahn attempted to buy the filmed entertainment studio in a process that lasted over a year. But thanks in part to a deal between Lionsgate and MHR, Icahn's stake was partially diluted and he was unable to execute a hostile takeover of the company.
NAV was down slightly last week, despite heavy hedge fund interest, and it remains well below its price from the beginning of the year as investors doubt that the company can execute on its new engine product. Icahn, in particular, hopes for a merger of Navistar with peer Oshkosh Corporation (OSK), another of his holdings.
Icahn has also been continuing his battle with Forest Laboratories, Inc. (FRX). On July 11, he filed a 14A urging other shareholders to support his four nominees to Forest's board. Icahn has been concerned about executive management practices at Forest, including potential succession for the company's 84-year-old CEO, a too-close relationship between the CEO and the Board of Directors, and a lack of transparency. Icahn owns about 26 million shares or 10% of the company, giving him a leg up on any corporate governance battles.
Compared to Icahn's position, other hedge funds are generally not making large commitments to Forest. Bernard Horn's Polaris Capital Management (see more of Polaris' portfolio) owns 1.3 million shares. The third largest hedge fund owner of Forest is D.E. Shaw, but its nearly 1.3 million shares amount to only 0.11% of its portfolio.