Vista Outdoor (NYSE:VSTO) announced on Monday that it had received an improved offer from the Czechoslovak Group (CSG) for the acquisition of the Kinetic Group business. The CSG group increased its bid for the Kinetic Group by $40 million to $2 billion, up from its prior bid of $1.96 billion. Kinetic Group is VSTO’s sporting products business.
Details of CSG’s Bid for VSTO’s Kinetic Group
Moreover, the CSG group has increased the cash consideration payable to Vista Outdoor stockholders by 12.5%, from $16 to $18 per share in cash. Based on the improved offer from CSG, Vista Outdoor shareholders will receive, for every VSTO share, one share of Revelyst common stock and $18.00 in cash at the close of the transaction. Revelyst is Vista’s outdoor products business.
As a result of the increased cash offer, Vista Outdoor will now be returning an additional $77 million of excess cash to its shareholders.
VSTO’s Sales Breakdown
Earlier this month, Vista received a revised offer from MNC Capital Partners of over $3 billion, or $39.50 per share, to acquire all the company’s outstanding shares. The manufacturer of outdoor sports and recreation products had rejected MNC Capital’s earlier offer of $37.50 per share, stating that the offer “significantly” undervalued the company.
MNC’s offer came even as VSTO has yet to complete the separation of its outdoor sports and recreation products businesses. The company’s sporting products business is an important component, comprising more than 50% of its total revenues.
Is VSTO a Good Buy?
Analysts remain cautiously optimistic about VSTO stock, with a Moderate Buy consensus rating based on two Buys and one Hold. Over the past year, VSTO has increased by more than 20%, and the average VSTO price target of $40 implies an upside potential of 15.9% from current levels.
