December 1st, 2023

Vista Outdoor Rejects Merger Proposal from Colt CZ — Continues to Pursue Sporting Products Division Sale to Czechoslovak Group

Vista outdoor sporting group Colt CZ CSG Federal CCI Remington Ammo Speer Hevi-Shot VSTO

Vista Outdoor Inc. (NYSE: VSTO) announced that its Board of Directors, following consultation with its financial and legal advisors, has rejected the unsolicited proposal received on November 22, 2023 from Colt CZ Group SE to combine Colt CZ and Vista Outdoor. It appears that the main reason the Colt CZ proposal was rejected is that the proposed $30.00 share price was too low and “did not take into account the value created by splitting the outdoor and sporting divisions” (Reuters). Vista Outdoor will continue to move forward with sale of its sporting products operations to the Czechoslovak Group A.S. (CSG), as announced this past October.

“The Board of Directors has determined that the (Colt CZ proposal) would not be more favorable to Vista stockholders from a financial point of view than the transactions contemplated by the CSG (agreement) and does not provide a basis for engagement with Colt CZ,” Vista Chief Executive Gary McArthur said in a letter posted on the company’s website.

Vista Outdoor will continue to proceed to sell its outdoor sporting products business to Czechoslovak Group (CSG) for $1.91 billion. This will involve transfer of some of the biggest names in the shooting/reloading world including: Federal, CCI, Remington Ammo, Speer, and Hevi-Shot. The sale and take-over is expected to be completed in 2024. CSG stated: “From the outset, we have believed that, compared to Colt’s offer, our agreement with Vista makes much more sense for Vista shareholders and for the future success of both (Vista) segments.”

Vista Outdoor’s Board of Directors stated that the determination to reject the Colt CZ proposal was made based on a number of factors, including:

The “purported value of $30 per Vista share in the November 22 [Colt CZ] Proposal significantly undervalues Vista”;

The November 22 Colt CZ Proposal “does not provide adequate details relating to the debt and equity financing contemplated thereby and does not include any binding commitments with respect to such financing”;

The November 22 Colt CZ Proposal “does not take into account the significant stockholder value that is expected to be created by the separation of the Outdoor Products and Sporting Products segments of Vista into two independent companies, each with its own dedicated strategic focus, enhanced ability to attract and retain top talent, tailored capital allocation philosophy, and set of competitive advantages.”

An official release stated: “The Vista Outdoor Board continues to recommend the acquisition of the Sporting Products business by Czechoslovak Group a.s. (“CSG”) and remains committed to acting in the best interests of Vista Outdoor stockholders.” And CSG has stated: “From the outset, we have believed that, compared to Colt’s offer, our agreement with Vista makes much more sense for Vista shareholders and for the future success of both (Vista) segments.”

The acquisition of the Sporting Products business by Czechoslovak Group is expected to close in calendar year 2024, subject to approval of Vista Outdoor’s stockholders, receipt of necessary regulatory approvals and other customary closing conditions.

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