The challenges facing Vista Outdoor’s plan to sell its ammo business and turn the remaining outdoor division into a standalone, publicly traded company appear to be mounting.
TIG Advisors, an institutional investor with 532,000 shares of Vista Outdoor, announced Friday that it plans to vote against the pending sale of Vista’s ammo business to Czechoslovak Group (CSG).
Instead, TIG said it favors the outright sale of all of Vista Outdoor to MNC Capital, which is offering to buy Vista for $42 per share. MNC wants to keep the company intact and take it private.
“The MNC offer presents both maximum certainty of value and less execution risk,” TIG said in a letter to the Vista Outdoor board of directors last week. “MNC has made its commitment clear, compensating Vista shareholders with $42 per share in cash. MNC has delivered on Vista’s asks, including delivery of financing and a merger agreement, and yet the Board now decides to change the goal posts arguing that the transaction will take months to close. This is a spurious argument given that the Board’s own “GEAR Up” transformation plan requires years to achieve and exposes shareholders to significant execution risk. Further, the company has relentlessly pressured the market to believe that the MNC offer significantly undervalues Revelyst (the remaining outdoor business) based on an unproven turnaround story.”
The tug of war about the future of the company has included competing bids, multiple tit-for-tat statements between the Vista board and MNC, and many more twists and turns.
Read The Daily’s primer about the Vista Outdoor sale saga here.
Shareholder Advisory Firm Recommends Vote Against Sale
Another factor working against Vista Outdoor’s plan that became public last week: Institutional Shareholder Services (ISS), an independent proxy advisory firm that advises large shareholders such as investment banks and asset management firms, recommended shareholders vote against the sale of the ammo business to CSG. Once details about MNC’s offer to buy the whole company came into the picture, ISS’s stance has shifted from supporting the sale of the ammo business to CSG, to advising shareholders to abstain, and now recommending they vote against the sale.
The Vista board was quite unhappy with ISS’s new stance, and said as much in a statement Thursday.
“Vista Outdoor strongly believes ISS has reached the wrong conclusion with respect to the CSG transaction and disagrees with the short-sighted and misinformed recommendation to Vista Outdoor stockholders,” the board said.
MNC Capital issued another statement today, urging the Vista board to engage with MNC to discuss the $42 per share offer.
“We continue to be confident that we can close the transaction in about 60 days after signing a merger agreement,” MNC said in a statement. “Your advisors will confirm that a cash deal with no regulatory issues can close in that time frame. Yet Vista publicly asserted that a closing ‘would take several months.’ We therefore urge the Board to perform and disclose analyses necessary for shareholders to make an informed decision and to reconsider its positions and engage with us to sign a merger agreement that we are confident your shareholders will approve. Both major independent shareholder advisory firms have spoken as to what they believe is best for shareholders. We are here and ready to engage constructively on the $42 deal the market supports.”
Currently, all shareholders are scheduled to vote on the sale of the ammunition business to CSG on July 23.
Vista Outdoor is the parent company of more than three dozen brands that design, manufacture, and market sporting and outdoor products. Brands include Bushnell, CamelBak, Bushnell Golf, Foresight Sports, Fox Racing, Bell Helmets, Camp Chef, Giro, Simms Fishing, QuietKat, Stone Glacier, Federal Ammunition, Remington Ammunition and more.
