By Scott Malone
(Reuters) - Activist investor Carl Icahn offered to buy all the outstanding shares of Oshkosh Corp
Icahn, the company's largest shareholder with a 9.45 percent stake, said the only condition on his $32.50-a-share offer was that shareholders elect a slate of directors whom he will nominate to the company's board.
"Mismanagement of this company has resulted in a lost decade of shareholder value," Icahn said in a statement. "Oshkosh needs proactive shareholders to bring a proactive management team together to weather a volatile economy."
Oshkosh said its board would advise shareholders of its position on the offer within 10 business days, and suggested that shareholders not act on the offer until the board has reviewed it.
Oshkosh shareholders had, in January, voted down an Icahn-backed slate of directors.
Shares of the company surged 12 percent to $29.98 on the news, earlier hitting $31.30, their highest since July 2011.
"It's not an unattractive price by any means, but it's surely not a fully valued price," said Eli Lustgarten, an analyst who covers Oshkosh at Longbow Research.
Lustgarten has a "buy" rating on Oshkosh with a $34 target price.
Profit at the Oshkosh, Wisconsin-based company slumped about 36 percent through the first nine months of its recently ended fiscal year, hurt by declines at its military-vehicle unit.
Last month, Oshkosh management met with analysts and laid out a plan to double annual profit by 2015, helped by cost costs and strong growth at its JLG aerial-lift arm.
In August, Icahn told Reuters he believed Oshkosh should spin off JLG, which it acquired in 2006 for $3 billion.
Oshkosh is not Icahn's only big holding in the U.S. trucking sector. He is also the third-largest shareholder of Navistar International Corp
Icahn proposed merging the two companies last year, a move supported by former Navistar Chief Executive Daniel, but opposed by Oshkosh.
Navistar shares rose 6 percent to $23.34.
"People are thinking that with Icahn involved in both, there's an opportunity to put them together and generate some shareholder value," said David Leiker, an analyst at Robert W. Baird & Co who covers Navistar.
Leiker said he didn't see a lot of sense in combining the two companies. While both make military trucks, they assemble them in different ways, he said, adding, "It's like bicycles and cars."
A spokeswoman for Navistar, which in late August replaced Ustian with former Textron Inc
Last week, Icahn was victorious in his campaign at Navistar when the maker of International-brand trucks agreed to accept Icahn associate, Vincent Intrieri, to its board. The company also agreed to accept another shareholder, Mark Rachesky, as a director and to take on one other director nominated by the two investors.
Oshkosh shareholders' rejection in January of Icahn's director nominees has not deterred the billionaire, who is known for taking large stakes in companies and pushing for management shake-ups or sales.
Icahn urged Oshkosh in August to spin off its JLG aerial-lift unit to shareholders, saying that business, which Oshkosh bought in 2006 for $3 billion, would do better on its own.
In a statement Thursday, he said that, once officially made, his tender offer would expire in 45 days, but that if at least 25 percent of the company's outstanding shares were sold to him, he would extend it.
Should he be able to boost his stake to 50.1 percent, Icahn added, "we will demand that the current board ... accelerate the upcoming annual meeting to allow the prompt election of our slate of directors so that the tender offer can close quickly."
Oshkosh shares have risen some 52 percent over the past year, while Navistar's have declined 39 percent. The broad Standard & Poor's 500 index <.SPX> has risen 10 percent.
(Reporting by Scott Malone; Editing by Bernadette Baum)