Vista Outdoor announced on Dec. 12 that the period for filing protests against the proposed sale of its Sporting Division to Czechoslovak Group a.s. (CSG)—under the Hart-Scott-Rodino Antitrust Improvements Act of 1976—had expired. Closure of that period without any official complaint clears yet another of the complex hurdles faced by major companies selling or purchasing sizeable firms. In this case it involves ownership change of a group of ammunition manufacturing legends that includes Federal, CCI, Speer, Remington Ammunition and others.
The agreement with CSG is expected to close in calendar year 2024, according to the Vista Outdoor press release. The transaction does, however, remain subject to receipt of the remaining required regulatory approvals, which include approvals from the Committee on Foreign Investment in the United States and Vista Outdoors stockholders, as well as other customary closing conditions.
CSG isn’t the only company that has made an offer, however. Colt CZ Group submitted an unsolicited proposal to merge with Vista Outdoor in mid-November. The Vista Outdoor Board of Directors—after consultation with its financial and legal advisors—rejected it a few days later, noting CSG’s original offer to purchase the group of famed ammunition and component companies for roughly $1.91 billion was financially more sound.
A letter sent to Colt CZ from the Vista Outdoor Board explained, “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 board also expressed concerns about financing, lack of transition details and a variety of other items that led to the refusal of the Colt CZ proposal.
The Vista Outdoor Board is continuing its recommendation to follow through on the definitive agreement sell its Sporting Products business to CSG.
