GATES CAPITAL MANAGEMENT BELIEVES $42 ALL-CASH OFFER FOR VISTA OUTDOOR IS SUPERIOR TO THE PROPOSED SALE OF THE KINETIC GROUP TO CSG
Gates Capital Management, owning 9.6% of Vista Outdoor (NYSE: VSTO), believes the $42 all-cash offer from MNC Capital Partners is superior to the proposed sale of The Kinetic Group to Czechoslovak Group (CSG). Gates Capital opposes the CSG proposal, citing Vista's recent financial results as evidence that selling the entire company provides better shareholder value. The firm argues that MNC's offer values Revelyst at approximately 22x LTM EBITDA, which is attractive given Revelyst's declining performance. ISS has recommended shareholders vote AGAINST the CSG merger proposal. Gates Capital also criticizes Vista's stale record date and encourages shareholders to voice their opinions to the Board of Directors.
Gates Capital Management, che possiede il 9,6% di Vista Outdoor (NYSE: VSTO), ritiene che l'
Gates Capital Management, dueño del 9,6% de Vista Outdoor (NYSE: VSTO), considera que la oferta en efectivo de $42 de MNC Capital Partners es superior a la venta propuesta del Kinetic Group al Czechoslovak Group (CSG). Gates Capital se opone a la propuesta de CSG, citando los recientes resultados financieros de Vista como evidencia de que la venta de toda la empresa proporciona un mejor valor para los accionistas. La firma argumenta que la oferta de MNC valora a Revelyst en aproximadamente 22 veces el EBITDA de los últimos doce meses, lo cual es atractivo dada la disminución del rendimiento de Revelyst. ISS ha recomendado a los accionistas votar EN CONTRA de la propuesta de fusión con el CSG. Gates Capital también critica la fecha de corte desactualizada de Vista y anima a los accionistas a expresar sus opiniones al Consejo de Administración.
게이츠 캐피탈 매니지먼트는 비스타 아울도어 (NYSE: VSTO)의 9.6%를 보유하고 있으며, MNC 캐피탈 파트너스의 $42 전액 현금 제안이 Czechoslovak Group (CSG)와의 Kinetic Group 판매 제안보다 우월하다고 보고 있습니다. 게이츠 캐피탈은 CSG 제안에 반대하며, 비스타의 최근 재무 결과를 인용하여 전체 회사를 매각하는 것이 주주 가치를 더 높인다고 주장합니다. 이 회사는 MNC의 제안이 Revelyst를 지난해 12개월 LTM EBITDA의 약 22배로 평가하고 있어 Revelyst의 성과 저하를 고려할 때 매력적이라고 주장합니다. ISS는 주주에게 CSG 합병 제안에 반대 투표할 것을 권장했습니다. 게이츠 캐피탈은 비스타의 구식 기준일도 비판하며 주주들이 이사회에 의견을 제시할 것을 촉구합니다.
Gates Capital Management, qui détient 9,6 % de Vista Outdoor (NYSE: VSTO), estime que l'offre en espèces de 42 $ de MNC Capital Partners est supérieure à la vente proposée du Kinetic Group au Czechoslovak Group (CSG). Gates Capital s'oppose à la proposition de CSG, citant les récents résultats financiers de Vista comme preuve que la vente de l'ensemble de l'entreprise fournit une meilleure valeur aux actionnaires. La société soutient que l'offre de MNC valorise Revelyst à environ 22 fois l'EBITDA des douze derniers mois, ce qui est attractif compte tenu de la performance en déclin de Revelyst. ISS a recommandé aux actionnaires de voter CONTRE la proposition de fusion avec le CSG. Gates Capital critique également la date d'enregistrement périmée de Vista et encourage les actionnaires à exprimer leurs opinions au conseil d'administration.
Gates Capital Management, das 9,6 % von Vista Outdoor (NYSE: VSTO) besitzt, ist der Meinung, dass das 42-Dollar-Barangebot von MNC Capital Partners die vorgeschlagene Verkauf des Kinetic Group an die Czechoslovak Group (CSG) übertrifft. Gates Capital lehnt den Vorschlag von CSG ab und führt die jüngsten finanziellen Ergebnisse von Vista als Beweis dafür an, dass der Verkauf des gesamten Unternehmens einen besseren Wert für die Aktionäre bietet. Die Firma argumentiert, dass das Angebot von MNC Revelyst mit etwa 22-fach EBITDA der letzten zwölf Monate bewertet, was angesichts der rückläufigen Leistung von Revelyst attraktiv ist. ISS hat den Aktionären empfohlen, gegen den CSG-Fusionsvorschlag zu stimmen. Gates Capital kritisiert auch das veraltete Stichtagsdatum von Vista und ermutigt die Aktionäre, ihre Meinungen dem Vorstand mitzuteilen.
- MNC Capital Partners offers a $42 all-cash deal for the entire Vista Outdoor company
- MNC's offer values Revelyst at approximately 22x LTM EBITDA
- ISS recommends shareholders vote AGAINST the CSG merger proposal
- Vista's Revelyst segment reported a 13% sales decline and nearly 200 basis point EBITDA margin decrease
- Revelyst's segment operating income was negative for the quarter ended June 2024
- Current trends make a spin-off or standalone operation of Revelyst less attractive
- A lawsuit has been filed alleging the Board and management are not acting in shareholders' best interests
Insights
The recent developments in Vista Outdoor's potential sale scenarios present a complex situation for investors. Let's break down the key points:
- MNC Capital Partners is offering
$42 per share in an all-cash deal for the entire company. - This competes with Czechoslovak Group's (CSG) offer to buy only The Kinetic Group division.
- Gates Capital Management, owning
9.6% of Vista, strongly favors the MNC offer.
The financial implications are significant. If we assume both MNC and CSG are valuing The Kinetic Group at
Revelyst's Q1 2025 results are concerning:
- Sales declined by over
13% - EBITDA margin dropped nearly
2% - Segment operating income was negative
The recommendation from ISS to vote against the CSG proposal adds weight to Gates Capital's position. However, the maintained April 1, 2024 record date for voting is problematic, potentially misrepresenting the current shareholder base.
For investors, the MNC offer provides certainty and a premium valuation, especially considering Revelyst's underperformance. The all-cash nature of the deal also eliminates market risk for shareholders. However, the ongoing legal challenges and board resistance add complexity to the situation.
The Vista Outdoor situation presents several legal and corporate governance issues that merit attention:
- The maintenance of an outdated record date (April 1, 2024) for the shareholder vote is a significant concern. This could potentially disenfranchise current shareholders and may not accurately represent the company's current ownership structure.
- The allegation of an entrenched management team and board of directors not acting in shareholders' best interests could lead to breach of fiduciary duty claims.
- A lawsuit has been filed, alleging that the board and management are prioritizing their professional reputations over shareholder interests in the sale process.
- The competing offers from MNC and CSG create a complex scenario where the board must carefully consider its Revlon duties to maximize shareholder value.
The board's decision to maintain a stale record date and potentially favor a partial sale over a full company acquisition could be scrutinized under the business judgment rule. Shareholders might argue that the board is not fulfilling its duty of care by not thoroughly exploring all options to maximize value.
The recommendation from ISS to vote against the CSG proposal adds an interesting dynamic. While proxy advisor recommendations are not legally binding, they can influence institutional investors and potentially impact the outcome of the shareholder vote.
Gates Capital Management's public statement and encouragement for other shareholders to contact the board directly could be seen as the beginning of a proxy fight or activist campaign. This situation may escalate if the board continues to resist the MNC offer without providing a compelling rationale for their decision.
Overall, this situation underscores the importance of proper corporate governance and transparent communication with shareholders, especially in the context of potential change-of-control transactions.
Reiterates Intention to Vote AGAINST the CSG Proposal
Recently Released Financial Results from Vista Make It Clear That Selling the Entire Company Provides Shareholders a Better Return Than Divesting The Kinetic Group
On Monday, July 22, 2024 Vista disclosed CSG's revised offer for The Kinetic Group in a press release (the "July 22 Press Release") as well as preliminary Q1 2025 financial results. On the same day, MNC reaffirmed its commitment to its fully financed
If shareholders assume CSG and MNC are each paying the same
We would also note that on July 24, 2024, leading independent proxy advisory firm Institutional Shareholder Services ("ISS") recommended that shareholders vote AGAINST the latest CSG merger proposal.
Furthermore, we believe Vista should set a more current record date in light of delaying the vote on the CSG proposal several times. Vista is maintaining a stale record date of April 1, 2024, which is 120 days before the currently scheduled vote on July 30, 2024. We believe there has been significant turnover in the shareholder base since April 1, 2024, and shareholders eligible to vote do not accurately represent the Company's current investor base. We are concerned that the stale record date is a sign of an entrenched management team and board of directors that is not acting in the best interest of current shareholders. The confounding actions by the Vista Board have also resulted in a recently filed lawsuit, which we believe accurately alleges in part: "the Board and management are instead selling the Company's crown jewel to protect their professional reputations and rectify the Company's recent history of disappointing capital allocation and over-leveraging so as to maintain their leadership positions in the post-close Revelyst."
Finally we encourage all Vista shareholders who believe the
About Gates Capital Management
Gates Capital Management is an event-driven alternative asset manager for institutional and private clients globally. Gates Capital was founded in 1996 and today has more than
Cautionary Statement Regarding Forward-Looking Statements
This press release does not constitute an offer to sell or solicitation of an offer to buy any of the securities described herein in any state to any person. The information herein contains "forward-looking statements". Specific forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and include, without limitation, words such as "may," "will," "expects," "believes," "anticipates," "plans," "estimates," "projects," "potential," "targets," "forecasts," "seeks," "could," "should" or the negative of such terms or other variations on such terms or comparable terminology. Similarly, statements that describe our objectives, plans or goals are forward-looking. Forward-looking statements are subject to various risks and uncertainties and assumptions. There can be no assurance that any idea or assumption herein is, or will be proven, correct or that any of the objectives, plans or goals stated herein will ultimately be undertaken or achieved. If one or more of such risks or uncertainties materialize, or if Gates Capital Management, Inc's ("Gates") underlying assumptions prove to be incorrect, the actual results may vary materially from outcomes indicated by these statements. Accordingly, forward-looking statements should not be regarded as a representation by Gates that the future plans, estimates or expectations contemplated will ever be achieved.
Media Contacts:
ASC Advisors
Taylor Ingraham / Morgan Davis
tingraham@ascadvisors.com / mdavis@ascadvisors.com
203-992-1230
Investor Contact:
Paul Lucas
Managing Director
plucas@gatescap.com
212-626-0290
View original content to download multimedia:https://www.prnewswire.com/news-releases/gates-capital-management-believes-42-all-cash-offer-for-vista-outdoor-is-superior-to-the-proposed-sale-of-the-kinetic-group-to-csg-302207320.html
SOURCE Gates Capital Management
FAQ
What is Gates Capital Management's stance on the MNC Capital Partners offer for Vista Outdoor (VSTO)?
How did Vista Outdoor's (VSTO) Revelyst segment perform in the recent quarter?
What recommendation did ISS make regarding the CSG merger proposal for Vista Outdoor (VSTO)?
What concerns does Gates Capital Management have about Vista Outdoor's (VSTO) record date for voting?
