MNC lifts Vista Outdoor bid after U.S. OK for Czech ammo deal
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U.S. Treasury Secretary Janet Yellen. Photo: Getty Images
MNC Capital raised its bid for Vista Outdoor to $3.2 billion on Wednesday, a day after the U.S. government's CFIUS cleared the company to sell its ammunition unit to a Czech arms dealer for $2 billion.
Why it matters: MNC's fourth raised bid is meant to pressure shareholders to vote down the Czech ammunition deal on July 2 and instead support the private equity firm's offer to buy the entire company.
Zoom in: CFIUS' approval of the Vista-CSG was a major boost to the transaction ahead of the shareholder vote next week. Vista has repeatedly said it recommends moving forward with the CSG deal and that the deal is the best path for shareholders.
- CFIUS, formally known as the Committee on Foreign Investment in the United States, is an agency within the U.S. Treasury department that reviews acquisitions by overseas buyers.
- "CFIUS clearance was the final regulatory approval required under the merger agreement with CSG for the closing of the Transaction," Vista Outdoor said in a statement late on Tuesday.
Catch up quick: After Vista and the Czechoslovakia Group (CSG) signed their deal last October, investment firm MNC Capital offered to buy the entire company for $35 per share, or $2.9 billion. MNC's latest offer is for $42 per share.
- In addition to selling ammo, Vista also sells outdoor gear such as camping equipment and CamelBak water packs. The ammo business is known as the Kinetic Group, and the gear division is called Revelyst.
- The bidding war to buy the ammo business has raged on for over a year. MNC initially bid for the ammo unit before it launched its full takeover pursuit earlier this year.
- Proxy advisory firm ISS has recommended shareholders abstain from the vote and encourage the company to engage with MNC, a stance it repeated on Wednesday in a note to clients. Fellow proxy firm Glass Lewis has recommended shareholders approve the CSG deal.
The intrigue: The latest gambit by MNC, run by a former Vista Outdoor board director, is meant to derail the vote and to somehow convince the company's board to reengage with the private equity firm to consider its offer.
What we're watching: Shareholders did not seem enamored with MNC's offers in the $35 per share range. The $42 per share offer, with possibility of going higher, could prove more convincing.
- Vista's soared 10% to $37.19 per share in midday trading on Wednesday.
This article has been updated with the stock price and ISS' reiteration of its guidance to shareholders.
