Vista Outdoor, Inc. said late Wednesday that following consultation with its financial and legal advisors, its board of directors had rejected the unsolicited proposal received from Colt CZ Group SE to acquire the company.

As reported by SGB Media, Colt CZ on November 22 made a cash-and-stock merger offer to acquire Vista Outdoor for $30 a share, or $1.74 billion. Czechoslovakia-based Colt CZ’s proposal calls for keeping the company together, scrapping plans to separate Vista’s Sporting Products and Outdoor Products businesses.

In October, Vista reached an agreement to sell the Sporting Products segment, including CCI, Federal, Hevi-Shot, Remington, and Speer, to Czechoslovak Group (CSG), a defense-oriented firearms company also based in Czechoslovakia. The all-cash deal was valued at $1.9 billion on an enterprise value basis, which includes debt.

Upon closing, Vista would continue to operate the Vista Outdoor business while being renamed Revelyst. The outdoor business includes Foresight Sports, Bushnell Golf, Fox, Bell, Giro, CamelBak, QuietKat, Bushnell, Primos, Simms, Camp Chef, and Stone Glacier.

In its press release issued Wednesday evening, Vista said it continues to recommend the acquisition of the Sporting Products business by CSG. Vista said the acquisition of the Sporting Products business by CSG is expected to close in calendar year 2024, subject to the approval of Vista Outdoor’s stockholders, receipt of necessary regulatory approvals and other customary closing conditions.

The press release also included a letter issued to Colt CZ that reads as follows:

November 29, 2023

Mr. Jan Drahota
Colt CZ Group SE
CEO & Chairman of the Board of Directors
náměstí Republiky 2090/3a
110 00 Prague 1, Czech Republic

Mr. Drahota:

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. (the “CSG Merger Agreement”) and (ii) the letter from Colt CZ Group SE (“Colt CZ”) to the Board of Directors of Vista dated as of November 22, 2023, outlining a proposal pursuant to which Colt CZ and Vista would be combined (the “November 22 Proposal”).

Vista’s Board of Directors has reviewed the November 22 Proposal, including consultation with its financial advisors and outside legal counsel.

The Board of Directors has determined that the November 22 Proposal would not be more favorable to Vista stockholders from a financial point of view than the transactions contemplated by the CSG Merger Agreement and does not provide a basis for engagement with Colt CZ. The Board of Directors is therefore rejecting the November 22 Proposal.

This determination by the Board of Directors was based on a number of factors, including that:

  • the purported value of $30 per Vista share in the November 22 Proposal significantly undervalues Vista;
  • the November 22 Proposal does not provide adequate detail to determine whether the proposed transaction actually values Vista at $30 per share;
  • the November 22 Proposal does not take into account the significant stockholder value that is expected to be created by the separation of the Outdoor Products and Sporting Products segments of Vista into two independent companies, each with its own dedicated strategic focus, enhanced ability to attract and retain top talent, tailored capital allocation philosophy, and set of competitive advantages;
  • the November 22 Proposal does not provide adequate details relating to the debt and equity financing contemplated thereby and does not include any binding commitments with respect to such financing; and
  • the November 22 Proposal does not provide adequate detail with respect to the proposed transaction, including, among other things, with respect to the proposed structure, transaction steps and contractual terms.

Gary McArthur, Interim CEO

Morgan Stanley & Co. LLC is acting as sole financial adviser to Vista Outdoor and Cravath, Swaine & Moore LLP is acting as legal adviser to Vista Outdoor. Moelis & Company LLC is acting as sole financial adviser to the independent directors of Vista Outdoor and Gibson, Dunn & Crutcher LLP is acting as legal adviser to the independent directors of Vista Outdoor.

Photo courtesy Vista Outdoor