Vista Outdoor Eyes Takeover Offers: Time to Buy VSTO Stock?

Key Points

• Vista Outdoor is an outdoor sports and lifestyle company comprised of more than 20 brands.
• Vista Outdoor initially accepted the acquisition offer from CSG, which is pending a shareholder vote.
• The MNC Capital's $42.00 all-cash offer for the whole company has caused the Board to delay the shareholder vote until a special shareholder meeting scheduled for July 23, 2024.

Vista Outdoor Inc. NYSE: VSTO is an outdoor products company comprised of many brands in the sporting and outdoor categories. While other outdoor stocks are selling off, Vista stock trades near 52-week highs, trading up 27.3% year-to-date (YTD). It received an unsolicited revised all-cash $42.00 per share takeover offer from MNC Capital. However, the MNC Capital offer came after the company accepted a $2 billion cash and stock offer for a part of Vista Outdoor’s business, the Kinetic Group.

Vista Outdoor operates in the consumer discretionary sector and competes with outdoor sports and apparel retailers like V.F. Co. NYSE: VFC and Canada Goose Holdings Inc. NYSE: GOOS.

Vista Outdoor’s Earlier Agreement to Sell Its Kinetic Group Segment

Although firearms and bike helmets might seem unrelated, Vista was once the outdoor division of Sturm, Ruger & Co. Inc. NYSE: RGR. The company is also selling its sporting products segment, the Kinetic Group, to Prague-based Czechoslovak Group (CSG) at $30 per share. The Kinetic Group comprises Federal Ammunition, Remington, CCI, Speer, Hevi-Shot, and Alliant Power brands.

CSG accumulated a 5.7% stake in Vista. CSG raised its bid to $2 billion, comprised of $18 in cash and one share of Revelyst, CSG's outdoors business segment. Aside from the confusing stock structure, the problem is the risk of government regulatory issues when dealing with foreign companies. National security concerns arise, especially when selling firearms and ammunition products to a foreign entity.

The deal is expected to close at the end of 2024, pending approval from Vista Outdoor shareholders and regulatory clearance from the Committee on Foreign Investment in the United States (CFIUS). In the event of merger termination, a $47.75 million break fee is payable to CSG. On June 25, 2025, the CFIUS cleared the sale of the Kinetic Group to CSG.

Vista Outdoor Faces Increased Buyout Offer from MNC Capital

MNC Capital Partners made a $39.50 per share all-cash offer for the whole company, including Kinetic Group, but Vista rejected the initial offer. On June 26, 2024, MNC Capital Partners upped their takeover bid to $42.00 per share or $3.2 billion for Visa Outdoor. MNC stated it would be the final offer. This caused Vista to delay the shareholder vote on the planned sale of the Kinetic Group to CSG, which was to take place on July 2, 2024. The Board of Directors is reviewing the $42.00 per share offer from MNC Capital Partners.

July 23 Shareholder Meeting: Vista Outdoor's Path Forward

Vista Outdoor announced a special shareholder meeting scheduled for 9:00 am CST on July 23, 2024, to enable the company to engage with shareholders ahead of the vote. The Board has requested that MNC provide evidence of committed financing by 9:00 am EST on July 1, 2024. The Board stated that despite MNC Capital's public statements that it has secured financing, MNC has never delivered evidence despite Vista's prior requests. There is a credibility issue. The Board still insists that shareholders vote for the agreed-upon sale of the Kinetic Group to CSG as it has received regulatory approval. The vote is scheduled at the special shareholder meeting.

VSTO Stock is in an Ascending Price Channel Capped at $42.00

The daily candlestick chart for VSTO illustrates the ascending price pattern. The parallel rising trendlines are comprised of an upper trendline representing higher highs and a rising lower trendline representing higher lows. The channel commenced off the $23.49 swing low on Oct. 25, 2023. The upside is naturally capped at $42.00 if MNC Capital’s bid is approved and proof of financing is submitted. Failing that, there will be pullbacks that may hit support levels at $33.24, $31.49, $28.44, and $27.64. The daily relative strength index (RSI) is rising towards the 70-band.

Vista Outdoor analyst ratings and price targets are at MarketBeat.