Vista Outdoor Rejects Unsolicited Indication of Interest from MNC Capital
Vista Outdoor announced the rejection of an unsolicited acquisition offer from MNC Capital, which proposed an all-cash transaction at $39.50 per share. After thorough evaluation, the Board determined that MNC's proposal undervalued the company compared to a merger agreement with Czechoslovak Group (CSG). Vista Outdoor has filed a supplementary presentation with the SEC outlining this decision.
The company also confirmed receiving a $2+ billion offer from a U.S.-based private investment firm for The Kinetic Group, which the Board believes could lead to a superior proposal. Despite these developments, Vista remains committed to the CSG merger agreement.
- Rejection of MNC Capital's offer indicates strong confidence in the CSG merger.
- Received a $2+ billion offer from a U.S. private investment firm for The Kinetic Group, showing high market interest.
- Comprehensive engagement and evaluation process with financial and legal advisors, indicating thorough decision-making.
- Rejection of MNC's $39.50 per share offer might lead to shareholder dissatisfaction.
- The ongoing commitment to CSG merger limits flexibility to pursue potentially better offers immediately.
- Uncertainty surrounding the final outcome of alternative offers could affect stock stability.
Insights
The rejection of MNC Capital's unsolicited acquisition offer by Vista Outdoor's Board of Directors demonstrates a keen strategy to maximize shareholder value. The offer price of $39.50 per share was determined to be undervalued, especially in comparison to the ongoing merger agreement with Czechoslovak Group (CSG). By rejecting MNC’s offer, the Board indicates its confidence in the current merger's potential to provide higher returns.
From a financial viewpoint, rejecting an all-cash transaction in favor of a merger may seem counterintuitive, but it’s important to consider the long-term strategic benefits. The CSG merger likely offers synergies and growth opportunities that an all-cash acquisition wouldn’t provide. Moreover, the mention of a separate $2+ billion offer for The Kinetic Group from a U.S.-based private investment firm suggests potential further valuation upside.
Retail investors should note the Board's commitment to maximizing shareholder value and fiduciary duty, which is a reassuring factor. In theory, this indicates that the management is aligned with the best interests of the shareholders. However, investors should be cautious about the speculative nature of mergers and acquisitions, as they often come with execution risks.
The decision by Vista Outdoor's Board to reject MNC Capital’s offer, while adhering to the terms of the existing merger agreement with CSG, illustrates a careful legal strategy. The Board's engagement with MNC, as outlined in the supplementary presentation filed with the SEC, indicates a transparent approach to evaluating all proposals. Legal diligence is important here as the Board must comply with fiduciary duties and contractual obligations under the CSG Merger Agreement.
Importantly, the receipt of another offer that meets the standards for engagement under the CSG agreement points to a well-negotiated contract that allows for consideration of superior proposals. This flexibility could prove beneficial for shareholders if a better offer materializes. However, any such engagement must be handled delicately to avoid potential legal conflicts or penalties.
Investors should appreciate the Board’s proactive legal stance, ensuring that all proposals are scrutinized rigorously to maximize shareholder value while adhering to legal obligations. Nevertheless, the potential for litigation or disputes cannot be entirely ruled out in the complex landscape of mergers and acquisitions.
Files Supplementary Presentation Regarding Engagement with MNC and Undervalued Proposal by MNC
Separately Confirms Receipt of Offer from an Alternative Party for The Kinetic Group
MNC’s Claims Contain Inaccuracies Not Supported by Facts (Graphic: Business Wire)
After a thorough evaluation of the merits and risks of MNC’s latest indication of interest, the Vista Outdoor Board has determined that MNC’s latest indication of interest would not be more favorable to Vista Outdoor stockholders from a financial point of view than, and would not reasonably be expected to be superior to, the transactions contemplated by the Czechoslovak Group a.s. (“CSG”) merger agreement. The Vista Outdoor Board has therefore rejected MNC’s latest indication of interest.
Vista Outdoor filed a supplemental presentation with the
The Company today issued a separate press release confirming receipt of a
The full text of the letter to MNC follows:
June 10, 2024
MNC Capital
Attention: Mark Gottfredson
Mr. Gottfredson:
I am writing on behalf of Vista Outdoor Inc. (“Vista”) in response to MNC Capital’s (“MNC”) letter dated June 6, 2024, expressing MNC’s interest in pursuing a transaction pursuant to which MNC would acquire Vista in an all-cash transaction for
Vista’s Board of Directors (the “Board”) has carefully reviewed the MNC Third Indication in consultation with our financial advisors and outside legal counsel.
After a thorough evaluation of the merits and risks of the MNC Third Indication, the Board has determined that the MNC Third Indication would not be more favorable to Vista stockholders from a financial point of view than, and would not reasonably be expected to be superior to, the transactions contemplated by the CSG Merger Agreement. The Board has therefore rejected the MNC Third Indication.
In light of the lack of compelling value in the MNC Third Indication, we continue to believe that our pending transaction with CSG will drive significantly greater value for our stockholders.
The Board takes its fiduciary responsibilities seriously and is deeply committed to maximizing value for all of our stockholders. The Board is always receptive to opportunities that will help us achieve that goal.
Regards,
Michael Callahan
Chairman of the Board of Directors of Vista Outdoor Inc.
Morgan Stanley & Co. LLC is acting as sole financial adviser to Vista Outdoor and Cravath, Swaine & Moore LLP is acting as legal adviser to Vista Outdoor. Moelis & Company LLC is acting as sole financial adviser to the independent directors of Vista Outdoor and Gibson, Dunn & Crutcher LLP is acting as legal adviser to the independent directors of Vista Outdoor.
About Vista Outdoor Inc.
Vista Outdoor (NYSE: VSTO) is the parent company of more than three dozen renowned 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. Our reporting segments, Outdoor Products and Sporting Products, provide consumers with a wide range of performance-driven, high-quality and innovative outdoor and sporting products. For news and information, visit our website at www.vistaoutdoor.com.
Forward-Looking Statements
Some of the statements made and information contained in this press release, excluding historical information, are “forward-looking statements,” including those that discuss, among other things: Vista Outdoor Inc.’s (“Vista Outdoor”, “we”, “us” or “our”) plans, objectives, expectations, intentions, strategies, goals, outlook or other non-historical matters; projections with respect to future revenues, income, earnings per share or other financial measures for Vista Outdoor; and the assumptions that underlie these matters. The words “believe,” “expect,” “anticipate,” “intend,” “aim,” “should” and similar expressions are intended to identify such forward-looking statements. To the extent that any such information is forward-looking, it is intended to fit within the safe harbor for forward-looking information provided by the Private Securities Litigation Reform Act of 1995.
Numerous risks, uncertainties and other factors could cause our actual results to differ materially from the expectations described in such forward-looking statements, including the following: risks related to the previously announced transaction among Vista Outdoor, Revelyst, Inc. (“Revelyst”), CSG Elevate II Inc., CSG Elevate III Inc. and CZECHOSLOVAK Group a.s. (the “Transaction”), including (i) the failure to receive, on a timely basis or otherwise, the required approval of the Transaction by our stockholders, (ii) the possibility that any or all of the various conditions to the consummation of the Transaction may not be satisfied or waived, including the failure to receive any required regulatory approvals from any applicable governmental entities (or any conditions, limitations or restrictions placed on such approvals), (iii) the possibility that competing offers or acquisition proposals may be made, (iv) the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement relating to the Transaction, including in circumstances which would require Vista Outdoor to pay a termination fee, (v) the effect of the announcement or pendency of the Transaction on our ability to attract, motivate or retain key executives and employees, our ability to maintain relationships with our customers, vendors, service providers and others with whom we do business, or our operating results and business generally, (vi) risks related to the Transaction diverting management’s attention from our ongoing business operations and (vii) that the Transaction may not achieve some or all of any anticipated benefits with respect to either business segment and that the Transaction may not be completed in accordance with our expected plans or anticipated timelines, or at all; impacts from the COVID-19 pandemic on our operations, the operations of our customers and suppliers and general economic conditions; supplier capacity constraints, production or shipping disruptions or quality or price issues affecting our operating costs; the supply, availability and costs of raw materials and components; increases in commodity, energy, and production costs; seasonality and weather conditions; our ability to complete acquisitions, realize expected benefits from acquisitions and integrate acquired businesses; reductions in or unexpected changes in or our inability to accurately forecast demand for ammunition, accessories, or other outdoor sports and recreation products; disruption in the service or significant increase in the cost of our primary delivery and shipping services for our products and components or a significant disruption at shipping ports; risks associated with diversification into new international and commercial markets, including regulatory compliance; our ability to take advantage of growth opportunities in international and commercial markets; our ability to obtain and maintain licenses to third-party technology; our ability to attract and retain key personnel; disruptions caused by catastrophic events; risks associated with our sales to significant retail customers, including unexpected cancellations, delays, and other changes to purchase orders; our competitive environment; our ability to adapt our products to changes in technology, the marketplace and customer preferences, including our ability to respond to shifting preferences of the end consumer from brick and mortar retail to online retail; our ability to maintain and enhance brand recognition and reputation; others’ use of social media to disseminate negative commentary about us, our products, and boycotts; the outcome of contingencies, including with respect to litigation and other proceedings relating to intellectual property, product liability, warranty liability, personal injury, and environmental remediation; our ability to comply with extensive federal, state and international laws, rules and regulations; changes in laws, rules and regulations relating to our business, such as federal and state ammunition regulations; risks associated with cybersecurity and other industrial and physical security threats; interest rate risk; changes in the current tariff structures; changes in tax rules or pronouncements; capital market volatility and the availability of financing; foreign currency exchange rates and fluctuations in those rates; general economic and business conditions in
You are cautioned not to place undue reliance on any forward-looking statements we make, which are based only on information currently available to us and speak only as of the date hereof. A more detailed description of risk factors that may affect our operating results can be found in Part 1, Item 1A, Risk Factors, of our Annual Report on Form 10-K for fiscal year 2024, and in the filings we make with the Securities and Exchange Commission (the “SEC”) from time to time. We undertake no obligation to update any forward-looking statements, except as otherwise required by law.
No Offer or Solicitation
This communication is neither an offer to sell, nor a solicitation of an offer to buy any securities, the solicitation of any vote, consent or approval in any jurisdiction pursuant to or in connection with the Transaction or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law.
Additional Information and Where to Find It
These materials may be deemed to be solicitation material in respect of the Transaction. In connection with the Transaction, Revelyst, a subsidiary of Vista Outdoor, filed with the SEC a registration statement on Form S-4 in connection with the proposed issuance of shares of common stock of Revelyst to Vista Outdoor stockholders pursuant to the Transaction, which Form S-4 includes a proxy statement of Vista Outdoor that also constitutes a prospectus of Revelyst (the “proxy statement/prospectus”). INVESTORS AND STOCKHOLDERS ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING OUR PROXY STATEMENT/PROSPECTUS, BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE TRANSACTION AND THE PARTIES TO THE TRANSACTION. The registration statement was declared effective by the SEC on March 22, 2024, and we have mailed the definitive proxy statement/prospectus to each of our stockholders entitled to vote at the meeting relating to the approval of the Transaction. Investors and stockholders may obtain the proxy statement/prospectus and any other documents free of charge through the SEC’s website at www.sec.gov. Copies of the documents filed with the SEC by Vista Outdoor are available free of charge on our website at www.vistaoutdoor.com.
Participants in Solicitation
Vista Outdoor, Revelyst, CSG Elevate II Inc., CSG Elevate III Inc. and CZECHOSLOVAK GROUP a.s. and their respective directors, executive officers and certain other members of management and employees, under SEC rules, may be deemed to be “participants” in the solicitation of proxies from our stockholders in respect of the Transaction. Information about our directors and executive officers is set forth in our proxy statement on Schedule 14A for our 2023 Annual Meeting of Stockholders, which was filed with the SEC on June 12, 2023, and subsequent statements of changes in beneficial ownership on file with the SEC. These documents are available free of charge through the SEC’s website at www.sec.gov. Additional information regarding the interests of potential participants in the solicitation of proxies in connection with the Transaction, which may, in some cases, be different than those of our stockholders generally, is also included in the proxy statement/prospectus relating to the Transaction.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240609376201/en/
Investor Contact:
Tyler Lindwall
Phone: 612-704-0147
Email: investor.relations@vistaoutdoor.com
Media Contact:
Eric Smith
Phone: 720-772-0877
Email: media.relations@vistaoutdoor.com
Source: Vista Outdoor Inc.
FAQ
Why did Vista Outdoor reject MNC Capital's offer?
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