On June 25, Vista Outdoor announced that the Committee on Foreign Investment in the United States (CFIUS) had approved of the planned sale of The Kinetic Group, Vista's ammunition brands, to Czechoslovak Group (CSG). The approval clears the final regulatory hurdle that would have halted the potential merger, and now that CFIUS has determined that there are "no unresolved security concerns," the transaction can be concluded, subject to the approval of Vista's stockholders.
“The CFIUS process involved a thorough review and investigation of the Transaction by numerous U.S. Government departments and agencies with a range of national security and other mandates,” said Michael Callahan, chairman of the Vista Outdoor board of directors. “We believe the end result supports our view that CSG—which has deep expertise in supply chain excellence and ammunition manufacturing and strong support for NATO and allied nations—will be an excellent owner of The Kinetic Group. CSG is fully committed to supporting our American workforce, American hunters and domestic and allied military and law enforcement partners.”
The CFIUS approval prompted MNC Capital, a rival bidder, to increase its offer to purchase all Vista Outdoor brands, thereby preventing the breakup between the company's ammunition and sporting goods segments, now called The Kinetic Group and Revelyst, respectively. The new MNC Capital offer bid $42 a share, or approximately $3.2 billion, up from its previous offer of $39.50 a share. The news caused Vista Outdoor's stock price to climb 11 percent.
"MNC expects that the Vista Board will move forward expeditiously to sign a merger agreement on the terms proposed. MNC believes a definitive agreement can be executed in a matter of days," the company's statement read.
A planned meeting of Vista Outdoor stockholders is scheduled for July 2, 2024, at 9 a.m. CST, where they will consider and vote on the proposal to adopt the merger agreement with CSG. The details of the transaction include a $2 billion purchase price, which represents a $90 million increase over the original offer of $1.91 billion, as well as $18 in cash consideration per share at closing, up from the original cash consideration of $12.90 per share. Following CFIUS regulatory approval, Vista's board of directors continued to recommend that stockholders vote in favor of the proposed merger agreement with CSG.
Update: Vista Outdoor announced on June 27 that it will adjourn the special meeting of stockholders originally scheduled for July 2 to July 23, 2024 at 9 a.m. CST to enable the company to engage with stockholders prior to the vote in light of recent developments. Vista also confirmed its receipt of the MNC Revised Indication and has issued a letter to MNC, requesting information, including evidence of committed financing, so the Vista Outdoor board of directors can assess the company's offer.
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