GATES CAPITAL MANAGEMENT EXPRESSES CONTINUED OPPOSITION TO VISTA OUTDOOR'S PROPOSED SALE OF THE KINETIC GROUP TO CSG

Rhea-AI Summary

Gates Capital Management, owning 9.6% of Vista Outdoor (NYSE: VSTO), has reiterated its opposition to the proposed sale of The Kinetic Group to Czechoslovak Group (CSG). In a letter to Vista's Board, Gates Capital expresses concerns that the transaction would have less value than the $42 all-cash offer from MNC Capital or a tax-free spin-off.

The investment firm urges Vista to:

• Release preliminary financial results for Q2 2024
• Set a new record date for shareholder voting
• Reconsider the proposed transaction
• Secure a higher price for The Kinetic Group, engage with MNC to sell the entire company, or revert to the original spin-off plan

Positive

• Gates Capital Management owns a significant 9.6% stake in Vista Outdoor, indicating strong investor interest
• MNC Capital has made a $42 all-cash offer for Vista Outdoor, potentially providing higher value for shareholders

Negative

• Gates Capital Management opposes the proposed sale of The Kinetic Group to CSG, suggesting potential shareholder dissatisfaction
• The current transaction is believed to have less value than alternative options, potentially undervaluing the company
• Lack of updated financial results for Q2 2024 may hinder informed decision-making by investors

NEW YORK, July 19, 2024 /PRNewswire/ -- Gates Capital Management, Inc. ("Gates Capital Management" or "we"), an event-driven alternative asset manager that beneficially owns 5,589,041 shares, or approximately 9.6%, of Vista Outdoor, Inc. ("Vista" or the "Company") (NYSE: VSTO), today reiterated its opposition to the pending sale of The Kinetic Group to Czechoslovak Group a.s. ("CSG") in a letter sent to the Vista Board of Directors.

The full text of the letter follows:   

July 19, 2024

Vista Outdoor Inc.
Attn: Board of Directors
1 Vista Way
Anoka, Minnesota  55303

Dear Members of the Board,

Gates Capital Management has been a long-term shareholder of Vista Outdoor, and currently beneficially owns 5,589,041 shares, or approximately 9.6%, of the outstanding common stock of the Company.  We are writing to the Board to express our continued opposition to the proposed sale of The Kinetic Group to CSG.  

We cannot understand how any shareholder would vote for a transaction that we believe is certain to have less value than either the $42 all-cash offer from MNC Capital ("MNC") or the long-term value that could be created through a tax-free spin-off.

We ask that Vista immediately release preliminary financial results for its quarter ended June 2024, including an updated balance sheet, so that investors can make an informed decision regarding the best path forward.

Finally, we believe Vista should set a new record date so that a larger percentage of current shareholders are eligible to participate in this important vote.

We continue to urge the Board to reconsider the transaction being proposed to shareholders at the upcoming special meeting and to act in the best interests of all shareholders by either securing a materially higher price for the Kinetic Group, engaging with MNC to sell the entire Company, or reverting to Vista's original spin-off plan.

Sincerely,

Jeff Gates
Managing Partner
Gates Capital Management

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 $2 billion in assets under management.  Further information is available at www.gatescap.com.

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

FAQ

What is Gates Capital Management's stance on Vista Outdoor's (VSTO) proposed sale of The Kinetic Group?

Gates Capital Management, owning 9.6% of Vista Outdoor (VSTO), opposes the proposed sale of The Kinetic Group to Czechoslovak Group (CSG), believing it has less value than other options.

What alternatives does Gates Capital Management suggest for Vista Outdoor (VSTO) instead of selling The Kinetic Group?

Gates Capital suggests Vista Outdoor (VSTO) should consider securing a higher price for The Kinetic Group, engaging with MNC Capital to sell the entire company, or reverting to the original spin-off plan.

What is the value of MNC Capital's offer for Vista Outdoor (VSTO)?

MNC Capital has made a $42 all-cash offer for Vista Outdoor (VSTO), which Gates Capital Management believes could provide higher value for shareholders.

What actions does Gates Capital Management want Vista Outdoor (VSTO) to take before the shareholder vote?

Gates Capital wants Vista Outdoor (VSTO) to release preliminary financial results for Q2 2024 and set a new record date to allow a larger percentage of current shareholders to participate in the vote.