UPDATE 2-Oshkosh board rejects Icahn offer as 'inadequate'


* Board rejects 'highly conditional and opportunistic' offer

* Adopts shareholder rights plan

* Shares gain 0.6 percent

Oct 26 (Reuters) - Oshkosh Corp's board unanimously rejected billionaire investor Carl Icahn's offer to buy the specialty truck maker, calling the bid ``inadequate,'' the company said on Friday.

The board ``unanimously concluded that Mr. Icahn`s unsolicited, inadequate, highly conditional and opportunistic offer significantly undervalues Oshkosh and is not in the best interests of all Oshkosh shareholders,'' Chairman Richard Donnelly said in a statement.

Oshkosh shares were up 0.6 percent at $29.93 in early trading.

Oshkosh also said Friday it will adopt a shareholder rights plan that will takke effect when any acquirer amasses a 10 percent stake, a point that is just above Icahn's holding.

Oshkosh will issue a right to buy one preferred share for each common share held on Nov. 5, but the rights would not apply to the acquirer.

Icahn, the company's largest shareholder, offered to buy the remainder of Oshkosh for $32.50 per share on Oct. 11, saying the only condition on the offer was that shareholders elect a slate of directors he would nominate. Icahn cited what he called decade-long mismanagement in announcing his bid.

This week, the investor named his first board nominee, picking the former chief executive officer of an Oshkosh unit that Icahn would like to see spun off.

Icahn's offer carries significant risk, Oshkosh CEO Charlie Shews said on a conference call Friday. Meanwhile, the company's results have begun to improve, and housing - a key market for Oshkosh trucks - is recovering.

``Icahn's offer significantly undervalues shareholders' investment in Oshkosh,'' Shews said on Friday. Beyond an initial statement, Oshkosh executives said they would not take analyst questions about their response to Icahn's bid.

The maker of tactical vehicles for the military, specialty trucks for construction, and emergency vehicles, earlier on Friday reported a higher quarterly profit and affirmed its 2013 and long-term profit forecasts.