©Reuters.
By Abigail Summerville and Ananya Mariam Rajesh
(Reuters) – Investment firm MNC Capital has offered to buy sporting goods and outdoor products company Vista Outdoor (NYSE:) for $2.9 billion including debt, it said on Friday, defying expected Vista’s sale of its sporting goods business to a foreign buyer.
MNC Capital said it submitted a proposal for $35 per share on Feb. 19. The offering price is a premium of nearly 17% to the closing price of Vista stock on Feb. 16.
Vista shares rose about 5% to $32.78 in early trading Friday.
The company said separately on Friday that its board of directors is reviewing the offer and that it has not changed its recommendation to support the acquisition of its sports products business by the Czechoslovakian Group (CSG).
Vista is in the midst of a planned sale of its sporting goods business to the private Czech defense and civil manufacturing company in a $1.91 billion deal announced last October.
Vista’s sporting goods unit includes its ammunition brands that count law enforcement and military customers.
MNC said its deal would keep Vista under US ownership and would not pose a national security risk or require a review by the Committee on Foreign Investment in the United States (CFIUS), unlike CSG which is in awaiting CFIUS approval.
MNC Capital’s Mark Gottfredson remained on Vista’s board until his resignation in January. The multinational plans to finance the deal with $1.5 billion in capital and $1.4 billion in debt. Equity partners include several wealthy families from Texas, where Gottfredson resides, and other states, according to a source familiar with the matter.
In November, Delaware, US-based Vista was approached by Czech arms maker Colt CZ Group with a cash-and-stock merger offer.
But Vista rejected the offer, saying it undervalued the company and was no better for shareholders than a rival offer, and went on to sell its sports division to CSG. Colt’s offer valued Vista at about $1.7 billion in November.
As of Thursday’s close, the company had a market capitalization of $1.82 billion.