Equities

Vista Outdoor Weighs $2bn Bid for Ammo Unit, Delays Vote

Vista Outdoor receives $2bn offer for ammunition unit, postpones shareholder meeting to July 2 for further discussions.

By Alex P. Chase

6/10, 11:21 EDT
Vista Outdoor Inc.
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Key Takeaway

  • Vista Outdoor received a $2 billion all-cash offer for its ammunition unit, including Remington, from an unnamed US investment firm.
  • Vista's board postponed the shareholder meeting to consider this new offer, while still recommending CSG's $1.9 billion bid.
  • Political and regulatory scrutiny remains high on CSG’s bid due to concerns over foreign ownership of a key US ammunition supplier.

Takeover Offer for Ammunition Business

Vista Outdoor announced it received a $2 billion all-cash takeover offer for its ammunition business, which includes the Remington brand, from an unnamed private investment firm in the US. This development raises the possibility of a multiway battle for the unit. The offer was received on June 7, and Vista disclosed this information on Monday. The company also mentioned it had rejected an improved proposal from MNC Capital Partners to acquire the entire company for over $3 billion.

Shares in Vista, which has a market value of $2.1 billion, saw a slight increase in early Monday trading, reaching $35.99. MNC’s latest offer for the group was pitched at $39.50 per share. Vista is currently in discussions to sell its ammunition business, Kinetic, to Czechoslovak Group (CSG), a privately owned Czech defense group. CSG had announced a recommended $1.9 billion bid for Kinetic last October. Vista also plans to list its outdoor products business, which includes brands like Giro and CamelBak, as a standalone company.

Board's Position and Shareholder Meeting

Vista's board of directors continues to recommend the CSG deal but has not yet stated whether it will accept the proposal from the unnamed private investment firm. The company has decided to adjourn the shareholder meeting initially scheduled for this Friday, June 14, where investors were supposed to vote on the CSG offer. The new meeting date is set for July 2.

Vista stated that the postponement would allow it to "engage with the alternative party." The board emphasized its commitment to "maximizing value for stockholders." CSG declined to comment on the third bidder. The Czech group's offer had previously sparked warnings from Republican politicians about placing a leading US ammunition supplier under foreign ownership. The deal remains subject to a review by the US Committee on Foreign Investment.

Political and Regulatory Considerations

CSG’s owner and chair, Michal Strnad, addressed the political criticism by noting that the Czech company had already received congressional clearance to buy two ammunition factories in the US as part of a separate 2022 acquisition. Strnad also highlighted that his company has NATO approval as a major weapons supplier, including to Ukraine in its conflict with Russia.

The political scrutiny surrounding the CSG deal underscores the complexities involved in foreign acquisitions of US defense-related businesses. The review by the US Committee on Foreign Investment will be a critical factor in determining the outcome of CSG's bid for Kinetic.

Management Quotes

  • Vista Outdoor:

    "The postponement would allow it to 'engage with the alternative party'. The board is 'committed to maximising value for stockholders'."