A major shareholder of Vista Outdoor (NYSE:VSTO) is urging the company’s board to accept the MNC Capital acquisition offer of $42 per share for the entire company and reject the offer from Czechoslovak Group (CSG) to buy The Kinetic Group for $2.1B, or $21 per share, as the MNC price represents a “far superior” offer to the pending acquisition by CSG.
“The [Vista Outdoor] Board, acting as fiduciaries to shareholders, should choose to execute the MNC transaction given it is in the best interest of all shareholders,” TIG Advisors said in their open letter to the board.
Furthermore, TIG accuses Vista’s board of “changing the goalposts” each time MNC accommodates Vista’s demands for a higher price and delivering on financing for the deal.
Based on the current share price of VSTO, the “market has spoken,” implying that at $36.41, the share price values the Revelyst stub at $15.41 per share. To match the value of the MNC bid implies a stub value of $21 per share, or a 36.3% premium to the current value. As such, the $42 offer from MNC is a “clear premium” to the total value created from the combination of the transaction with CSG and the Revelyst stub.
After receiving the increased offer from CSG of $21 per share, Vista’s (VSTO) board unanimously rejected MNC Capital’s final offer of $42 per share, calling it “inadequate and opportunistic,” preferring the CSG offer for The Kinetic Group. The transaction with CSG is scheduled to close this month after having received all regulatory approval, including that from the Committee on Foreign Investment in the United States (CFIUS).