Vista Outdoor Inc (NYSE:VSTO) is trending up in extended hours after Colt CZ Group SE proposed a business combination that would enable the outdoor sports and recreation products company to recapture the lost shareholder value.
Here’s what Colt proposed today
Jan Drahota – the Chief Executive of Colt said in a letter to Vista Outdoor today that his superior proposal would value each of its share at $30 that translates to a near 20% premium on their previous close.
Vista shareholders will own 55% of the new Vista that would have a net leverage of 1.8 times the LFY adjusted EBITDA, he added.
The news arrives only weeks after Vista Outdoor reported a 13% annualised decline in its revenue in the third quarter. Its shares are currently down more than 20% versus their year-to-date high.
Colt currently has a 5.7% stake in the New York-listed firm.
Watch here: https://www.youtube.com/embed/y2VgrdN_bs4?feature=oembedVista Outdoor was hit hard last month
The strategic combination that Colt proposed on Wednesday includes a $900 million buyback – $600 million of which will be funded via new equity issued and the remaining via debt.
Last month, Vista Outdoor was hit hard following a $1.91 billion all-cash with Czechoslovak Group to sell its Sport Products segment, months after announcing plans of splitting the company. According to Drahota:
We would keep the company together. With separation of Sporting Products segment, remaining Outdoor Products segment will be subscale as a standalone public company with substantial risk.
On December 14th, Vista Outdoor will present at the ROTH MKM 12th Annual Deer Valley Event.
The post Vista Outdoor receives business combination proposal from Colt appeared first on Invezz