NEW YORK (BRAIN) Vista Outdoor Inc.'s board has rejected an unsolicited acquisition offer made last month by MNC Capital. The offer was to buy the company for $35 per share, a 17% premium over Vista Outdoor's current stock price, worth about $2.9 billion.
The company's board continues to recommend accepting an offer from Czechoslovak Group (CSG) to buy its Sporting Products business, an acquisition that the company said will be completed this year, subject to approval by Vista Outdoor's stockholders and regulatory approvals.
The MNC offer would have acquired both the Sporting Products business (which contains Vista Outdoor's ammunition business), and its Revelyst business unit, which contains its bike and outdoor brands.
Michael Callahan, chairman of the company's board, said "Following careful review with our experienced team of financial and legal advisors, the Board determined that the transaction contemplated by MNC Capital's indication of interest significantly undervalues the Company and is not in the best interest of our stockholders. In particular, the indication of interest significantly undervalues the Revelyst business, which we expect to double standalone adjusted EBITDA in FY25 and achieve mid-teens adjusted EBITDA margin in the long term. The indication also lacks evidence of procured committed financing and is not reasonably capable of being completed. We take our fiduciary responsibilities seriously and are always open to opportunities that maximize stockholder value."
"We continue to firmly believe that our pending transaction with CSG and the separation of Revelyst as a standalone public company will drive significantly greater value for our stockholders," Callahan said.
"CSG is fully committed to Sporting Products' iconic American brands and expanding our legacy of U.S. manufacturing, support for military and law enforcement customers, and investments in conservation and our hunting and shooting heritage. At the same time, Revelyst is poised to leverage meticulous craftsmanship and cross-collaboration across its portfolio of category-defining brands as a standalone public company. We are confident that this is the best path to unlock value for our stockholders."
In December, the board rejected a buyout offer from Colt CZ worth $1.91 billion.
