Federal munitions owner receives improved offer from Czech company, rejects latest from US investors

Vista Outdoor announced Tuesday that Czech company CSG has increased its bid for its ammunition brands, including Federal, by $50 million.

Anoka-based Vista also said it rejected a revised offer from MNC Capital Partners to take the entire company private, despite continued pressure from conservative politicians to sell the munitions brands to a U.S. company.

CSG says it will now pay $1.96 billion for the Kinetic Group, the collection of ammunition brands that also includes the Remington, Speer and CCI brands. Under the proposal, Vista’s outdoor brands would remain as a standalone public company called Revelyst Inc. The updated CSG offering would see Vista shareholders get $16 per share for each share of Vista Outdoor they own and a share of the new company, Revelyst Inc. Vista said that due to aggressive debt repayment in the fourth quarter, shareholders would likely also receive a larger special dividend after the closing of the transaction. Revelyst would issue a special cash dividend in excess of $250 million.

The CSG agreement must obtain approval from the Committee on Foreign Investment in the United States, which reports to the Treasury Department. Several lawmakers wrote letters to the committee, including Treasury Secretary Janet Yellen, urging them not to approve the sale.

The deal must also be approved at a special shareholder meeting that has been postponed until June 14. Other customary closing conditions must be satisfied, but Vista’s board expects the CSG/Revelyst deal to close in 2024.

At the same time, Vista’s board of directors informed investor group MNC Capital Partners that it had carefully reviewed its revised offer and, after consultation with legal and financial advisors, had determined that it was not more favorable to Vista shareholders than the CSG/Revelyst plan.

MNC Capital had made a revised offer of $37.50 per share on March 25, and on April 22, Vista announced that it would engage further with MNC Capital to see if the company could improve its offer.

“After a thorough evaluation of the merits and risks of MNC’s revised guidance, the board of directors has determined that MNC’s revised guidance would not be more favorable to Vista’s shareholders from a financial perspective than, and is not reasonably expected to be greater than that of MNC in the transactions contemplated by the CSG Merger Agreement, the Board of Directors therefore rejected MNC’s revised guidance,” Vista Chairman Michael Callahan wrote in. a letter addressed to Mark Gottfredson, who led the bid for MNC Capital Partners.

Callahan’s letter ended with the statement that Vista’s board was committed to maximizing shareholder value, which appears to leave open the possibility of accepting revised offers. “The Board of Directors is always receptive to opportunities that will help us achieve this goal,” Callahan wrote.

A spokesperson for MNC Capital said the company had no comment on Vista’s posts today.