Norris McLaughlin & Marcus, P.A.

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REWIND: International Business News #40

Posted on October 12th, 2012 | Author:

  • Activist Carl Icahn has set his eyes on a new target, truck manufacturer Oshkosh Corp.  Icahn, who is already the company’s largest shareholder with a 9.45 percent stake, conditioned any share purchase offer on his ability to nominate and control the company’s board. The company has asked shareholders not to act on Icahn’s offer of $32.50 per share until after 10 days, giving the board an opportunity to review the offer. Icahn’s offer to purchase Oshkosh’s shares raised the question of whether he would seek a merger, or other deal, between Oshkosh and Navistar International Corp., another truck maker in which Icahn also has a majority stake.
  • In what might have been a warning of its less than impressive post-IPO performance, correspondence between Facebook and the Securities and Exchange Commission that came to light this week suggests that Facebook may have been overstating its number of users.  After reviewing the company’s proposed IPO prospectus, filed in February of this year, officials with the SEC were skeptical of figures citing the number of mobile users and the amount of sales revenue to be generated from such users, who often are shown less ads than non-mobile users.  These numbers have an impact on investors, especially in light of data that suggested the number of mobile users were growing at a rate faster than that of ad revenue.  It also sheds light on challenges faced by the SEC and investors on how to assess the value and information being provided by Web-based consumer companies, as similar challenges were faced with daily deal provider Groupon.
  • Sprint-Nextel is in discussions with Japanese telecommunications company SoftBank, regarding its interest in making a potential investment in Sprint. The No. 3 cellphone provider in the U.S. is hoping the investment of capital will allow it to improve infrastructure, including its Long-Term Evolution (LTE) network, and increase its market share. The deal would also give SoftBank an entry to the U.S. market, and raised speculation about the impact of the potential deal on Clearwire, a wireless company in which Sprint owns a substantial stake.
  • In news that will make kids smile, Hostess Foods announced the company has filed a plan to emerge from bankruptcy.   The maker of iconic snacks such as Twinkies and household staples such as Wonder Bread, filed for bankruptcy in January of this year. Under its proposed plan, the company states it will seek to reduce  employees’ wages, by 8%, reduce health benefits, freeze pension plan payments, and reduce its obligations to creditors.  Under the terms of the plan, 75% of the company would remain in the hands of existing lenders, including Silver Point Finance, LLC, while the remaining 25% would go to the company’s unions.  The company hopes to emerge from bankruptcy within the next few months.