Pawan Goenka, president, automotive, Mahindra & Mahindra, told ET that the US repercussions are not going to affect Mahindra Navistar Automotive (MNAL) since it does not depend heavily on the US partner.
“As far as we know, no company is taking any strategic interest in Navistar right now. There are two investors who hold 14.9% in the company, and it had recently taken a poison pill,” he said.
A poison pill is a strategy used by corporations to discourage hostile takeovers. With a poison pill, the target company attempts to make its stock less attractive to the acquirer.
The plan reportedly gives stockholders an option to buy $280 worth of shares at $140.
“MNAL is self-sufficient;
Over the past six months, private investors like Carl Icahn and Mark Rachesky — co-founder and president of MHR Fund Management — who are considered activist shareholders, have each raised their respective stakes to nearly 15%, raising fears of a hostile takeover of Navistar and forcing the company to adopt a poison pill.
Goenka also stressed that management positions are independently held by Mahindra Navistar company, except for three or four positions, which are managed by Mahindra executives and one Navistar official.
“The MD and chief financial officer are from M&M and the head of engineering is from Navistar; the rest are MNAL executives and mostly Indians,” added Goenka.