Ammo maker’s deal tactics carry trigger warning

Vista Outdoor

24/09/2024 15:44

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are his own.)
    By Jonathan Guilford
       NEW YORK, Sept 24 (Reuters Breakingviews) - Vista
Outdoor keeps maneuvering to split bullets from camping gear to
avoid selling the whole company for $3 bln. It has now further
clouded the process by eliciting a minority investment in the
retail rump at a curious valuation. The lesson here is on
overdoing takeover defense.

    Full view will be published shortly.
    Follow @JMAGuilford on X
    
    CONTEXT NEWS
    Vista Outdoor on Sept. 24 postponed a shareholder vote on
the sale of its ammunition segment, which includes the Remington
brand, to defense company Czechoslovak Group. In the latest of
multiple delays, the special meeting that had been rescheduled
for Sept. 27 is now provisionally set for Oct. 9.
    The agreed buyer sweetened the terms of its offer on Sept.
13 to $2.15 billion, increasing the upfront cash paid to
shareholders and agreeing to invest $150 million in Vista’s
remaining outdoor equipment unit, Revelyst, at an implied
valuation of $2 billion.
    Investment firm MNC Capital has sought to buy all of Vista
in partnership with an undisclosed buyout shop in a roughly $3
billion deal. Vista said on Sept. 18 that it had held separate
conversations with MNC’s partner about a potential transaction
involving Revelyst.
    The takeover target subsequently disclosed that the buyout
firm is only interested in a deal in which all of Vista is sold
at once, and will not entertain a standalone acquisition of
Revelyst.
    Morgan Stanley is advising Vista Outdoor while Moelis is
advising the company’s independent directors.

 (Editing by Jeffrey Goldfarb and Pranav Kiran)
 ((For previous columns by the author, Reuters customers can
click on  GUILFORD/  
Jonathan.Guilford@thomsonreuters.com))