Titan International (NYSE:TWI) revealed on Friday that Jana had upped its stake in the company to over 22%. Although Jana didn't disclose anything noteworthy in this filing, they do have a long history in the company, which may help shed light on possible motives for the acquisitions. In October 2005, Titan was the subject of a proposed buyout at $18 per share buy One Equity Partners LLC. Jana was responsible for blocking this deal, after sending a letter to the Titan Board demanding either respond to its demands or explain why $18 per share was a fair price. Jana cited several reasons for its belief that Titan shares are undervalued at $18 in a both a SC 13D filing in October and a SC 13D/A filing with the SEC in December, where the company noted:

"... Pro-forma for the acquisition of Goodyear's agricultural tires business and adjusting for the non-operating assets, the $18 offer price represents only 5.6x trailing twelve-month EBITDA. For this reason, we believe any sale of the Company should either be postponed until the benefits of the Goodyear acquisition are realized, or alternately should be at a price which more appropriately reflects the added value that will arise following the close of this acquisition. We also would like to point out that just earlier this year Company management expressed to us a concern that a private equity buyer would attempt to buy the Company for $18, which management at the time described as less than fair value.

Other events have also strengthened our view that the proposed price falls short of fair value and fails to fully reflect the strength of both the Company and general industry trends. For example, reflecting strong industry fundamentals, the stock price of one of Titan's significant customers, Deere & Co., has increased by almost 17% since October 12, 2005, the day after One Equity's offer was announced. We believe that Titan's stock would have risen during this period as well, particularly given that the outlook for North American agricultural equipment sales continues to be strong in general, were it not being held down by One Equity's low bid. In addition, Titan Europe, in which Titan holds a 29% interest, saw its stock price increase by over 15% in the days following the announcement of an acquisition which would materially increase its size and provide significant operating synergies. We believe it is reasonable to assume that were it not for the proposed sale to One Equity at $18 per share, Titan's share price would have also seen the benefit of this acquisition by Titan Europe."

Since this time, the stock has trended down from around $20 to its current levels right around the mid $17 per share. The company has made an effort to cut costs by laying off some employees, while it has made headway in its own efforts by signing several new contracts with both Deere & Co. and Grove, among others. Whether or not the company can turn itself around remains to be seen; however, this move by Jana should be encouraging for long-term investors. This is definitely a stock worth watching.

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