Vista Outdoor explores sale of sporting gear unit in strategic review
Adds investor comment in paragraphs 7, 8
July 30 (Reuters) -Vista Outdoor VSTO.N, which is in the process of selling its ammunition unit, said on Tuesday it was open to selling its outdoor sporting gear business and expecting an increased bid for the whole company from MNC Capital.
Vista expects investment firm MNC to raise its existing $3.2 billion buyout offer in "short order". The company had rejected that bid saying it undervalued its sporting gear unit, Revelyst.
The company also said Czechoslovak Group (CSG) was considering acquiring Revelyst, in addition to its current $2.15 billion bid for Vista's ammunition business, Kinetic Group.
Besides, Vista said it was still considering its previously announced plan of spinning off the two businesses.
The bidding war has been ongoing since the start of the year, with Vista rejecting multiple offers from MNC and supporting Prague-based defense firm CSG's bid for Kinetic Group, which raised national security concerns even though it was granted regulatory clearance in the United States.
The latest development came after CSG's bid for Kinetic Group faced opposition from several proxy advisory groups, including Institutional Shareholder Services, and shareholders such as Gates Capital Management.
"The standalone prospects for Revelyst really include a lot of material risks that I don't think the management team of Vista had done enough to convince us given their operating history," saidRaj Vazirani, founder of Vazirani Asset Management, which owns less than 1% of Vista Outdoor.
"...I think it would be strongly preferable to shareholders for CSG to make a bid for the entire company."
CSG had raised the base purchase price for Kinetic Group last week. Shortly after that, MNC said it was open to increase its offer if Vista would engage.
Vista said on Tuesday it would engage with MNC. Shares of the company rose as much as 5.6% to their highest level in more than two years at $41.
The company also postponed the special meeting, where shareholders were expected to vote on the CSG deal, to Sept. 13 from July 30.
MNC declined to comment and CSG did not immediately respond to a query fromReuters.
Morgan Stanley & Co is the financial adviser to Vista Outdoor, and Cravath, Swaine & Moore is the legal adviser.
Reporting by Savyata Mishra and Granth Vanaik in Bengaluru; Editing by Shilpi Majumdar
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