MNC Capital Partners upped its offer to acquire Vista Outdoor to $42 a share in cash — making "one final effort" to complete a deal and break up the $2 billion sale of Vista's Kinetic Group ammunition unit. VSTO stock jumped 9% in early Wednesday stock market action, a sign that investors see a good chance that Vista will accept the new offer.
Wednesday's announcement that MNC Capital raised its bid to $42 from $39.50 marked the latest move in an ongoing drama that has played out since last October. That's when Czechoslovak Group, a Czech industrial conglomerate, offered $1.91 billion for Kinetic Group, which includes such brands as Remington Ammunition and Federal Ammunition.
Vista had already announced a plan to strategically split off its ammunition arm into a separately traded company from its Revelyst outdoor products unit, which includes branded biking, golfing and fishing gear.
MNC initially offered $35 in February. Meanwhile, the Czechoslovak Group raised its offer to $1.96 billion and finally to $2 billion in recent days.
The final offer from MNC comes after the Czechoslovak Group's purchase won approval on Monday from the Committee on Foreign Investment in the U.S. MNC had previously called its offer superior, in part because it didn't require CFIUS approval for the sale of the strategically important ammunition business to a foreign entity.
But now that the CFIUS hurdle has been cleared, MNC had to pony up more cash in order to deliver a superior offer.
MNC has said that the Revelyst outdoor products unit would be better off as private company as it continues a multiyear "turnaround plan."
MNC is composed of investors that include Mark Gottfredson, who resigned from Vista's board of directors in January.
VSTO Stock
In announcing its latest offer, MNC noted that Vista shares closed at 33.78 on Tuesday. "The shares would have closed significantly lower without the expectation that MNC would be continuing to pursue the acquisition.
Vista Outdoor jumped 9.6% to 37.02 early Wednesday, or about 12% below the value of the all-cash offer.
Vista will owe a $47.75 million breakup fee to the Czechoslovak Group if it calls off the current deal.
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