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Vista Outdoor Inc.’s stock fell slightly early Monday, after the maker of sports and outdoor products including ammunition said its board has rejected an unsolicited bid from MNC Capital offering to acquire the company for $35 a share in cash.
The offer was reported on Friday by the Wall Street Journal, which said it valued the company at $2.9 billion, including debt. The stock
VSTO,
closed up 6.5% on Friday at $33.23.
The board continues to recommend the acquisition of the sporting products business by Czechoslovak Group a.s., “and remains committed to the strategy of standing up the Outdoor Products business (“Revelyst”) as a standalone public company to drive the greatest value for our stockholders,” the company said in a statement.
The sporting products deal is expected to close in 2024, once the company’s shareholders and regulators give their approval.
“We have been actively engaged with the Committee on Foreign Investment in the United States (‘CFIUS’) and our team is working with CFIUS to obtain its clearance,” the company said.
The MNC offer which was received on Feb. 19, “significantly undervalues the company” and is not in the best interest of shareholders, said Chairman Michael Callahan.
The offer does not take into account the shareholder value that’s expected to be created by the separation of outdoor products and sports products into two independent companies, with Czechoslovak Group committed to sporting products brands and to expanding its legacy of U.S. manufacturing support for military and law enforcement customers, he added.
MNC has offered no evidence that it has committed financing.
“This is particularly concerning in light of MNC’s repeated failure to deliver executed debt commitment letters with respect to the debt financing contemplated by the proposals it made in September and October 2023 to acquire Vista’s Sporting Products business” said Callahan.
Vista Outdoor is the parent to brands including Remington rifles and shotguns, Bushnell cameras and binoculars and Camp Chef outdoor cooking products.
The stock has gained 14.6% in the last 12 months, while the S&P 500
SPX
has gained 27%.
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