PRAGUE: Czech gunmaker Colt CZ Group has made a cash-and-stock merger offer to Vista Outdoor , valuing the US sporting and outdoor goods group's shares at a 16 per cent premium.
The deal comes amid Vista's planned sale of its sporting products business to privately held Czech defence and civil manufacturing company Czechoslovak Group (CSG), announced in October in a $1.91 billion deal.
Colt CZ's tie-up offer values Vista at about $1.7 billion, according to Reuters calculations.
Vista said in a statement it had not made any decision about the $30 per share proposal, above its last closing price of around $25.75, though below a 2023 high of $33.78 hit in September.
Colt CZ said it proposed keeping the company together, scrapping plans to separate Vista at this time.
"The market's view of the Czechoslovak Group transaction was clear in its reaction to the announcement, which resulted in the rapid fall in (Vista's) share price on October 16, 2023," Colt CZ said in a letter to Vista's board published on its website late on Wednesday.
"We would keep the company together, allowing continued upside for current Vista shareholders with the 'New Vista' retaining its listing in the US"
Colt CZ's offer involves $900 million in new financing, including $600 million in new equity issued at the transaction price and $300 million in debt. Colt CZ added it already had strong support from its lenders.
A buyback after closing would compensate for share dilution, analysts said. Vista shareholders would hold about 55 per cent in the new company under the deal, Colt CZ said.
Vista said it would review Colt CZ's proposal but that it had not made any change in its recommendation for the CSG deal.
"Vista Outdoor stockholders do not need to take any action at this time," it said.
CSG declined to comment.
When announcing the sale of its sporting products business on October 16, Vista also cut its full-year sales forecast.
Colt CZ, along with a majority shareholder and its chairman, together acquired more than 5 per cent of Vista shares, they announced in October.
The Czech group acquired US gun brand Colt in 2021.
Colt CZ said on Thursday its adjusted nine-month earnings before interest, tax, deprecation and amortisation (EBITDA) fell 17.3 per cent year-on-year to 1.9 billion crowns ($84.8 million), as a recovery in the US commercial market had been slower than expected. Colt CZ shares fell around 3 per cent at the Prague open on Thursday but had recovered to trade nearly 1 per cent higher by 1053 GMT. - Reuters
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