On Wednesday, June 26, MNC increased its all-cash offer to outright acquire Vista to $42 per share, or about $3.2 billion, marking the third time the Montreal-based investment firm had increased its bid since its first offer arrived in February. In a statement, MNC said it believes that its acquisition of Vista is in the best interests of shareholders, employees and national security, and, hence, decided to “make one final effort for such acquisition” by increasing its June 6 proposal from $39.50 per share all cash to $42.00 per share all cash. “MNC said that it cannot see any possible basis or reason to further raise it.”
The enhanced offer follows Vista’s announcement that it received government clearance (see below) for the proposed sale of its ammunition business, The Kinetic Group, to Prague-based Czechoslovak Group a.s. (CSG).
Vista Outdoor, also in Thursday’s July 27 statement, confirmed that it had received MNC’s revised offer.
Vista said, “Vista Outdoor’s Board of Directors remains committed to acting in the best interests of Vista Outdoor stockholders. The Board will carefully review the MNC Revised Indication in accordance with its fiduciary duties and its obligations under the existing merger agreement with Czechoslovak Group a.s. (“CSG”), in consultation with its financial and legal advisors.”
The Board has issued a letter to MNC, reprinted below, requesting that MNC provide certain information, including evidence of committed financing, required for the Board to assess the MNC Revised Indication by no later than 9:00 a.m. EST on July 1, 2024. Vista Outdoor noted that, despite MNC’s public statements, it had secured financing and Vista Outdoor’s prior requests for evidence of the financing. MNC has never delivered to Vista Outdoor evidence of committed financing ready to be executed.
Vista said its Board continues to recommend Vista Outdoor stockholders vote in favor of the proposal to adopt the merger agreement with CSG at the Vista Outdoor special meeting of stockholders. Vista Outdoor noted that it had received all regulatory approvals required under the merger agreement with CSG to close the CSG transaction.
The full text of the letter to MNC follows.
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June 27, 2024
MNC Capital
Attention: Mark Gottfredson
Mr. Gottfredson:
We refer to (i) the agreement and plan of merger dated as of October 15, 2023, between Vista Outdoor Inc. (“Vista”), Revelyst, Inc., CSG Elevate II Inc, CSG Elevate III Inc., and, solely for the purposes of the Guarantor Provisions as defined therein, CZECHOSLOVAK GROUP a.s. (as amended from time to time, the “CSG Merger Agreement”) and (ii) the letter from MNC Capital (“MNC”) to Vista’s Board of Directors dated as of June 26, 2024, expressing MNC’s interest in pursuing a transaction pursuant to which MNC would acquire Vista for $42.00 per Vista share (the “MNC Revised Indication”).
Each capitalized term used but not defined herein shall have the meaning assigned to such term in the CSG Merger Agreement.
As you are aware, Vista is subject to various restrictions under the CSG Merger Agreement with respect to Company Acquisition Proposals. This letter is being sent to MNC solely to clarify the terms and conditions of the MNC Revised Indication, pursuant to Section 6.09(b)(i) of the CSG Merger Agreement.
Yesterday, Vista requested that MNC provide (1) the identity of each of the sources of the proposed debt and equity financing for the MNC Revised Indication, (2) copies of the commitment letters with respect to the proposed debt and equity financing for such indication (together with all exhibits thereto and any related documents) and (3) a copy of the merger agreement MNC proposes to execute in connection with such indication. As at the date of this letter, MNC has yet to provide this information and documentation.
Vista Outdoor hereby reiterates its request that MNC provide such information and documentation and that MNC do so by no later than 9:00am ET on July 1, 2024.
Regards,
Michael Callahan
Chairman of the Board of Directors of Vista Outdoor Inc.
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EXEC: Vista Outdoor Secures U.S. Government Approval for Ammo Business Sale to CSG
