GATES CAPITAL MANAGEMENT BELIEVES $42 ALL-CASH OFFER FOR VISTA OUTDOOR IS SUPERIOR TO THE PROPOSED SALE OF THE KINETIC GROUP TO CSG
Rhea-AI Summary
Gates Capital Management, owning 9.6% of Vista Outdoor (NYSE: VSTO), believes the $42 all-cash offer from MNC Capital Partners is superior to the proposed sale of The Kinetic Group to Czechoslovak Group (CSG). Gates Capital opposes the CSG proposal, citing Vista's recent financial results as evidence that selling the entire company provides better shareholder value. The firm argues that MNC's offer values Revelyst at approximately 22x LTM EBITDA, which is attractive given Revelyst's declining performance. ISS has recommended shareholders vote AGAINST the CSG merger proposal. Gates Capital also criticizes Vista's stale record date and encourages shareholders to voice their opinions to the Board of Directors.
Positive
- MNC Capital Partners offers a $42 all-cash deal for the entire Vista Outdoor company
- MNC's offer values Revelyst at approximately 22x LTM EBITDA
- ISS recommends shareholders vote AGAINST the CSG merger proposal
Negative
- Vista's Revelyst segment reported a 13% sales decline and nearly 200 basis point EBITDA margin decrease
- Revelyst's segment operating income was negative for the quarter ended June 2024
- Current trends make a spin-off or standalone operation of Revelyst less attractive
- A lawsuit has been filed alleging the Board and management are not acting in shareholders' best interests
News Market Reaction – VSTO
In the trading session that priced this news, VSTO gained 1.93%, reflecting a mild positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
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Reiterates Intention to Vote AGAINST the CSG Proposal
Recently Released Financial Results from Vista Make It Clear That Selling the Entire Company Provides Shareholders a Better Return Than Divesting The Kinetic Group
On Monday, July 22, 2024 Vista disclosed CSG's revised offer for The Kinetic Group in a press release (the "July 22 Press Release") as well as preliminary Q1 2025 financial results. On the same day, MNC reaffirmed its commitment to its fully financed
If shareholders assume CSG and MNC are each paying the same
We would also note that on July 24, 2024, leading independent proxy advisory firm Institutional Shareholder Services ("ISS") recommended that shareholders vote AGAINST the latest CSG merger proposal.
Furthermore, we believe Vista should set a more current record date in light of delaying the vote on the CSG proposal several times. Vista is maintaining a stale record date of April 1, 2024, which is 120 days before the currently scheduled vote on July 30, 2024. We believe there has been significant turnover in the shareholder base since April 1, 2024, and shareholders eligible to vote do not accurately represent the Company's current investor base. We are concerned that the stale record date is a sign of an entrenched management team and board of directors that is not acting in the best interest of current shareholders. The confounding actions by the Vista Board have also resulted in a recently filed lawsuit, which we believe accurately alleges in part: "the Board and management are instead selling the Company's crown jewel to protect their professional reputations and rectify the Company's recent history of disappointing capital allocation and over-leveraging so as to maintain their leadership positions in the post-close Revelyst."
Finally we encourage all Vista shareholders who believe the
About Gates Capital Management
Gates Capital Management is an event-driven alternative asset manager for institutional and private clients globally. Gates Capital was founded in 1996 and today has more than
Cautionary Statement Regarding Forward-Looking Statements
This press release does not constitute an offer to sell or solicitation of an offer to buy any of the securities described herein in any state to any person. The information herein contains "forward-looking statements". Specific forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and include, without limitation, words such as "may," "will," "expects," "believes," "anticipates," "plans," "estimates," "projects," "potential," "targets," "forecasts," "seeks," "could," "should" or the negative of such terms or other variations on such terms or comparable terminology. Similarly, statements that describe our objectives, plans or goals are forward-looking. Forward-looking statements are subject to various risks and uncertainties and assumptions. There can be no assurance that any idea or assumption herein is, or will be proven, correct or that any of the objectives, plans or goals stated herein will ultimately be undertaken or achieved. If one or more of such risks or uncertainties materialize, or if Gates Capital Management, Inc's ("Gates") underlying assumptions prove to be incorrect, the actual results may vary materially from outcomes indicated by these statements. Accordingly, forward-looking statements should not be regarded as a representation by Gates that the future plans, estimates or expectations contemplated will ever be achieved.
Media Contacts:
ASC Advisors
Taylor Ingraham / Morgan Davis
tingraham@ascadvisors.com / mdavis@ascadvisors.com
203-992-1230
Investor Contact:
Paul Lucas
Managing Director
plucas@gatescap.com
212-626-0290
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SOURCE Gates Capital Management