Vista Outdoor’s plan to sell its ammunition arm to Czechoslovak Group (CSG) could close this month after its board negotiated a higher price for the merger and rejected a competing offer from MNC Capital.
CSG agreed to pay $2.1 billion, or an additional $100 million, for The Kinetic Group in an amendment to the merger agreement, according to a news release. Vista Outdoor shareholders will receive an additional $3 per common stock share, or $21 cash per share, as well as one share of Revelyst common stock. Revelyst is the new name for Vista’s outdoor performance gear company.
Stockholders still have to approve the plan. Vista’s board voted unanimously in favor of it and unanimously rejected MNC’s offer, calling it “inadequate and opportunistic,” said the release. MNC offered in June to buy Vista Outdoor outright for $42 per common stock share, with plans to take the entire company private.
“After a thorough evaluation of the merits and risks of the MNC Final Indication, the Board has determined that the MNC Final Indication would not be more favorable to Vista stockholders from a financial point of view than, and would not reasonably be expected to be superior to, the transactions contemplated by the CSG Merger Agreement.” said Vista Board Chair Michael Callahan in a letter to MNC Capital.
“The Board has therefore rejected the MNC Final Indication.”
Vista announced its plans to separate its ammo and outdoor divisions two years ago, and has embarked on a long, complicated saga that included outreach to 26 potential buyers and complex regulatory approvals for the ammo business sale to foreign-owned CSG, which raised some concerns about national security.
Vista Outdoor trades on the New York Stock Exchange under the ticker symbol VSTO. If the sale of the ammunition business is approved by shareholders, Revelyst, the go-forward outdoor performance gear company, will trade as GEAR.
