Glass Lewis recommends Vista Outdoor shareholders to vote in favor of deal with CSG

5:30 pm Thursday, July 18th, 2024

By Granth Vanaik

(Reuters) – Proxy advisory firm Glass Lewis has recommended Vista Outdoor shareholders to vote in favor of the proposed merger of the company’s ammunition unit with Czechoslovak Group (CSG), in a report seen by Reuters on Thursday.

Glass Lewis, which previously recommended stockholders to abstain from voting for the deal with Prague-based defense firm CSG on July 23, wrote that the support would be “the best option” to maximize shareholder value at this time.

“With CSG having further raised its offer price … the goalposts have moved with respect to the implied valuation of the company as a whole,” Glass Lewis said, adding that Vista should be able to deliver on the turnaround efforts for its outdoor products business.

The support comes days after another proxy advisory firm, Institutional Shareholder Services, issued a recommendation that stockholders should vote against CSG’s deal as the bid from another party, MNC Capital, appeared to be “a better alternative”.

Vista said on Thursday that Glass Lewis’ support reaffirmed its conviction that the CSG transaction was in the best interest of stockholders.

MNC Capital declined to comment.

Vista and its ammunition unit, Kinetic Group, have been at the center of a months-long bidding war saga between CSG and MNC Capital, amid rising demand for military supplies since the start of the Russia-Ukraine conflict.

The company has repeatedly advocated in favor of the regulatory-approved deal with CSG, even as investors have begun mounting pressure to accept MNC Capital’s final offer of $42 per share for the entire business.

Gates Capital Management, which owns about a 9.6% stake in the company, sent a letter on Wednesday to the board signaling its intention to vote against the deal with CSG.

The parent of Federal Ammunition and Remington Ammunition has previously rejected MNC Capital’s bid several times saying it undervalued the company and its performance gear business, Revelyst.

(Reporting by Granth Vanaik in Bengaluru; Editing by Alan Barona)