Vista Outdoor’s board of directors will take another look at its options following criticism from shareholders for the board’s unanimous support for a $2.15 billion offer from The Czechoslovak Group (CSG) for The Kinetic Group, its ammunition arm.
“We recognize the continuing support received from many of our stockholders for the CSG transaction and the feedback from some of our stockholders with respect to other strategic alternatives,” said Mike Callahan, chairman of Vista’s board of directors, in a statement. “We take the views of our stockholders very seriously and believe it is prudent to evaluate all strategic alternatives.”
The board said it still recommends shareholders vote in favor of the CSG transaction at its special shareholders meeting, which will now be pushed back to September 13. It had already been delayed from July 23 to July 30.
In the meantime, the board said it will review:
- Potentially selling Revelyst, its outdoor branch, which CSG is considering acquiring in addition to The Kinetic Group, according to a news release.
- Negotiating a higher bid from MNC Capital, which offered $42 per share for all of Vista Outdoor.
- Separating Revelyst and The Kinetic Group in a spin-off.
Read The Daily’s primer about the Vista Outdoor sale saga here.
GAMCO Asset Management Joins Chorus of Shareholders Who Oppose CSG Transaction
Vista shareholder GAMCO Asset Management Inc. (“GAMCO”), issued a press release Monday saying that it would not support the CSG transaction. Its clients and affiliates own approximately 613,207 shares of Vista Outdoor, or approximately 1.05% of Vista’s common stock.
Since Vista’s board said it unanimously supported selling The Kinetic Group to CSG:
- A Vista shareholder filed a lawsuit last Tuesday alleging that the board is putting its own reputations ahead of reviewing the quality of the transactions such as CSG’s offer.
- Gates Capital, which owns 5,589,041 shares (or 9.6%) of Outdoor Vista, said in a letter to the board of directors that a previous $2.1 billion CSG offer was too low.
- TIG Advisors, an institutional investor with 532,000 shares, said it would vote against the proposal to sell the ammo business to CSG.
- Institutional Shareholder Services (ISS), an independent proxy advisory firm that advises large shareholders, recommended shareholders vote against the sale of the ammo business to CSG.
Vista will host its full quarterly earnings conference call on August 6 at 9 a.m. ET.
“In addition to engaging with CSG and MNC and its private equity partner, we also look forward to reviewing any other strategic alternative for Vista Outdoor that would maximize value for stockholders,” Callahan said. “While we conduct this strategic review, we remain as focused as ever on delivering high-quality, innovative products for our consumers around the world.”
