Czechoslovak Group (CSG) increased its previous offer to buy Vista Outdoor’s ammunition arm to include a 7.5% stake in Revelyst, the company’s outdoor division, in an effort to beat out a competing offer from MNC Capital to buy the company outright.
In addition to its offer to buy The Kinetic Group for $2.15 billion, CSG would also pay $150 million for the Revelyst shares, or approximately $31 per share, valuing Revelyst at $2 billion, according to a news release.
CSG also increased the cash consideration payable to Vista shareholders from $24 per share to $28 per share.
“The $150 million of cash payable by CSG for the purchase of Revelyst shares plus additional cash from Vista Outdoor’s balance sheet will be returned to Vista Outdoor stockholders, increasing the cash consideration payable in the Revised CSG Transaction by $4 per share to $28 per share,” reads the press release.
When the deal closes, Vista Outdoor shareholders would receive $28 in cash per share and one share of Revelyst common stock for each Vista Outdoor share.
Following the closing of the CSG transaction, Revelyst plans to establish an initial $50 million share repurchase program.
Read our guide to Vista Outdoor’s long, tortured sale saga here.
Vista Outdoor Board Urges MNC to Deliver Final Offer
CSG’s revised proposal delivers more value for the two sides of Vista’s business than MNC Capital’s revised offer of $43 cash per share, which implies a value of approximately $1.9 billion for The Kinetic Group and $1.2 billion for Revelyst, according to Vista Outdoor’s board.
Vista Outdoor urged MNC Capital to deliver its “best and final proposal as soon as possible” in the news release.
The board also alleged that Gates Capital, a large Vista shareholder that is advocating for a deal with MNC Capital, has a conflict.
“The board recently learned that the company’s second largest stockholder, Gates Capital Management Inc. (“Gates Capital”), is included in MNC’s equity consortium,” said the release. Given its involvement with MNC, Gates Capital’s public expression in favor of MNC’s proposal reflects a bias and conflict of interest.”
Vote Scheduled for Sept. 27
Anna Glaessgen, a senior analyst at B. Riley Financial who covers Vista Outdoor, noted in a memo on Friday that the initial end date of Vista’s merger agreement with CSG is Oct. 15.
The shareholder vote on the matter has been delayed six times, and is now scheduled for Sept. 27. A further delay could put the deal at risk, Glaessgen wrote.
Eric Nyman, the CEO of Revelyst, and Jason Vanderbrink, the CEO of The Kinetic Group, were last week granted incentive awards of $1.2 million upon the completion of Vista Outdoor’s strategic review.
