A week has gone by and there’s been more developments in the messy sale process of all, or part, of Vista Outdoor. The Camp Chef parent company, by way of Revelyst, has pushed back the vote on the sale to CSG for what should be the final time.
There was supposed to be a shareholder vote this Friday regarding the sale of the Kinetic Group (Vista’s shooting brands) to CSG. As has happened multiple times already, the vote has been pushed to October 9th at 9 am CT.
This is likely the latest that the vote can happen because the termination date on the merger agreement with CSG is October 15th. At least publicly, CSG seems unwilling to change the termination date.
We are committed to executing our fully financed transaction with Vista Outdoor, which we believe maximizes value for Vista Outdoor stockholders. With the October 15th termination date for the transaction fast approaching, the upcoming October 9th special meeting will be the last and final opportunity for Vista Outdoor stockholders to vote to receive $2.15 billion in cash value for The Kinetic Group and shares of Revelyst – in which CSG has committed to invest $150 million for a 7.5% stake.
Michal Strnad, Chief Executive Officer and the owner of CSG
Vista continues to explore the option of selling Revelyst (their outdoor products arm) to a private equity firm that was a backer of the rejected MNC Capital takeover offer. There are some complications with that path though because it would have to happen prior to the sale of the Kinetic Group, and CSG currently doesn’t like the deal.
We remain open minded and are working in good faith with the Private Equity Firm and Vista Outdoor to see if a mutually beneficial outcome can be achieved; however, we continue to have serious concerns with the Private Equity Firm’s latest proposal. While we will continue to engage with the Private Equity Firm, there remain notable challenges that need to be overcome.
Michal Strnad, Chief Executive Officer and the owner of CSG
The details of the issues with the proposal for Revelyst weren’t revealed, but one obvious complication is CSG agreed to buy 7.5% of Revelyst for $150 million. That would value the company at $2 billion.
The private equity offer for all of Revelyst is for $1.1 billion. That would imply that CSG would have to write down their shares immediately for the transaction to occur.
Gates Capital
Gates Capital, who owns 9.6% of Vista, has come out again against the sale to CSG. They say that it isn’t the best option for shareholders.
We strongly believe that the currently proposed transaction with CSG to sell only The Kinetic Group is not in the best interest of shareholders as it would eliminate the possibility of subsequently selling Revelyst to this private equity firm. For this reason, we see no reason to support any transaction that doesn’t include a comprehensive sale of the entire Company.
Gates Capital Management Letter Dated Sept 24, 2024
It’s worth noting that it was revealed that Gates Capital is also part of MNC’s equity consortium, who also has an offer waiting for Vista Outdoor. It doesn’t take a big leap to imagine that they would prefer the MNC deal given that they stand to benefit from it on both sides of the transaction.