Key Summary: On November 22, 2023, Colt CZ proposed a strategic combination with Vista Outdoor valuing the company at $30.00 per share and including a $900 million share repurchase post-transaction. On July 17, 2024, Gates Capital Management, owning 9.6% of Vista, opposed the sale of its Sporting Products business to Czechoslovak Group for $2.1 billion, arguing it undervalued the asset and supported alternatives, including negotiating with MNC Capital's $42 per share bid or a tax-free spin-off plan. On September 10, 2024, Gates Capital Management announced ongoing discussions with the company and MNC Capital Partners regarding the gates-gates-capital-management-update-on-vista-outdoor-s-vsto-strategic-review-and-mnc-offercapital-management-update-on-vista-outdoor-s-vsto-strategic-review-and-mnc-offerrevised all-cash MNC Offer and other potential proposals, including rollover transactions related to any merger or business combination.Market Cap: $2.2 billion | Vista Outdoor Inc. designs, manufactures, and markets outdoor recreation and shooting sports products. in the United States and internationally.
On November 22, 2023, Colt CZ (5.7%) sent a letter to the Board proposing a strategic combination between Colt CZ and the company that would value the company at $30.00 per share and include a $900 million share repurchase to be executed following closing of the proposed transaction.
On July 17, 2024, Gates Capital Management, owning 9.6% of Vista Outdoor, sent a letter to Vista's Board opposing the sale of its Sporting Products business, The Kinetic Group, to Czechoslovak Group for $2.1 billion. Gates argued the sale price undervalued the asset, which generated over $400 million in annual free cash flow, and criticized the early retirement of $500 million in low-interest debt, transferring value from shareholders to bondholders. Gates also supported Institutional Shareholder Services' recommendation to vote against the sale and proposed alternatives, including negotiating with MNC Capital's $42 per share bid for Vista or reverting to a tax-free spin-off plan for The Kinetic Group and Revelyst.
On July 26, 2024, Gates Capital Management, Inc. announced its support for MNC Capital Partners, L.P.'s $42 per share all-cash offer for Vista Outdoor, Inc. Gates Capital deemed MNC's proposal superior to Czechoslovak Group's offer for The Kinetic Group, citing concerns over Vista's recent financial performance and strategic direction. The firm also criticized Vista's management for maintaining an outdated shareholder record date and suggested that shareholders voice their support for the MNC offer directly to Vista's Board of Directors. Source
On September 10, 2024, Gates Capital Management announced that following the company's review of strategic alternatives and engagement with MNC Capital Partners regarding its revised all-cash offer (MNC Offer), Gates Capital have been and may continue to be involved in discussions with the company and other parties, including MNC. These discussions focus on evaluating the MNC Offer and other potential proposals, including rollover transactions related to any merger or business combination involving the company. Source
On September 24, 2024, Gates Capital issued a press release opposing the current CSG proposal to sell The Kinetic Group and urges Vista Outdoor to pursue an all-cash sale of the entire company. Gates Capital supports ISS's recommendation to vote against the CSG proposal and emphasizes the potential benefits of a comprehensive all-cash transaction for Vista shareholders.
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