TIG Advisors pushes for alternative Vista Outdoor buyout

NEW YORK - TIG Advisors, LLC, a New York-based investment advisor with approximately $2.1 billion in assets under management, has publicly expressed its preference for MNC Capital's proposal to purchase Vista Outdoor (NYSE:VSTO) Inc. for $42 per share in cash.

TIG Advisors, which holds about 532,000 shares of Vista Outdoor (NYSE:VSTO), is advocating against the company's ongoing sale to Czechoslovak Group a.s. ("CSG") and intends to vote against the deal.

In a letter to Vista Outdoor's Board of Directors, TIG Advisors outlined its stance, emphasizing that the MNC Capital offer guarantees shareholders a maximum certainty of value and presents less execution risk than the current transaction with CSG.

The investment firm criticized the Board's reluctance to accept the MNC bid, despite it being fully financed and ready to proceed, suggesting that the Board's concerns about execution risks were unfounded when compared to the risks inherent in the company's own long-term transformation plan.

TIG Advisors also highlighted market reactions, noting that the stock price as of July 10, before an ISS recommendation in favor of the MNC bid, implied that the market valued the remaining part of the company, referred to as the Revelyst stub, at significantly less than the offer from MNC. The firm argued that the Board's high valuation expectations for Revelyst, based on aggressive EBITDA growth and trading multiples, were unrealistic.

The firm's letter also expressed concern over the Board's stance that it would not reengage with MNC regardless of the shareholder vote outcome, effectively leaving shareholders to choose between the CSG deal or no deal at all. TIG Advisors urged the Board to reconsider and engage with MNC if the CSG transaction is rejected by the shareholders.

In other recent news, Vista Outdoor Inc . has experienced notable developments. The company has urged stockholders to vote in favor of selling its Kinetic Group business to Czechoslovak Group a.s. (CSG), a transaction valued at $2.1 billion.

This move comes amidst a public disagreement with MNC Capital, which made counterclaims about the proposed deal's value. Vista Outdoor has also completed the sale of its wood pellet manufacturing arm, Fiber Energy Products, to Lignetics, Inc., as part of Revelyst's GEAR Up transformation initiative.

In financial news, Vista Outdoor reported Q4 total sales of $2.75 billion, with adjusted EBITDA margins at 16.1%. Analyst firms Roth/MKM and B.Riley maintained a Buy rating on the company's shares, while Lake Street Capital Markets downgraded the company from Buy to Hold. These are recent developments in the operations of Vista Outdoor Inc.

InvestingPro Insights

Amid the ongoing discussions about Vista Outdoor Inc.'s (NYSE:VSTO) potential sale, investors and stakeholders are closely monitoring the company's financial health and market performance. According to InvestingPro data, Vista Outdoor boasts a market capitalization of $2.22 billion, indicating a significant presence in its sector. Despite challenges, the company has shown a strong return over the last three months, with a 15.09% price total return, reflecting a positive investor sentiment and potentially strengthening its position in the negotiations.

InvestingPro Tips suggest that Vista Outdoor is expected to turn profitable this year, which may contribute to the investment advisor's confidence in the company's value proposition and future prospects. Moreover, the company's liquid assets surpass its short-term obligations, providing a solid financial footing that could support its long-term transformation plan and operational stability.

For investors seeking a deeper analysis, InvestingPro offers additional tips, including insights into earnings revisions and trading patterns. There are 11 more InvestingPro Tips available that could provide valuable context to those evaluating Vista Outdoor's strategic options. Interested readers can unlock these insights and more with a special offer: use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.

With a next earnings date set for July 24, 2024, stakeholders will be keen to assess Vista Outdoor's financial performance and strategic direction. The information provided here, combined with the full suite of InvestingPro Tips, can offer a comprehensive understanding of the company's position as it navigates this pivotal moment.

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