NEW YORK (AP) -- Shares of Navistar International Corp. rose Friday as hedge fund MHR Fund Management LLC disclosed that it is now the heavy truck and engine maker's largest shareholder.
THE SPARK: MHR Fund disclosed in a filing with the Securities & Exchange Commission that it now holds approximately 9.3 million shares, or 13.6 percent, of Navistar. This tops billionaire investor Carl Icahn's 11.9 percent stake in the Lisle, Ill., company.
MHR Fund is led by Mark Rachesky, a former Icahn protege. Last year Rachesky thwarted Icahn's attempt to take over Lions Gate Entertainment Corp.
THE BACKGROUND: Icahn boosted his stake in Navistar from 9.8 percent last week, a day after the company posted a $172 million second-quarter loss and cut its full-year guidance to a level well below Wall Street expectations. The company has run into some federal compliance issues with its engines as well.
Italy's Fiat also came out last week saying that it might be interested in buying a stake in Navistar so that it can get a slice of the U.S. truck market. A published report also said that Germany's Volkswagen AG is in the early stages of considering buying a stake in Navistar.
SHARE ACTION: Navistar's stock climbed $2.27, or 8.2 percent, to $30.10 in afternoon trading. The shares have traded in a 52-week range of $20.21 to $58.50.