ISS recommends Vista Outdoor shareholders vote against proposed deal with CSG
July 11 (Reuters) -Institutional Shareholder Services has recommended Vista Outdoor VSTO.N shareholders to vote against the proposed merger of the company's ammunitions unit with Prague-based defense firm Czechoslovak Group (CSG), in a letter seen by Reuters.
ISS wrote that MNC Capital's final buyout offer of $42 per share "appears to be a better alternative" citing market skepticism around Vista's forecast of doubling core profit in fiscal 2025 from its standalone Revelyst business after the proposed CSG deal.
On Thursday, Vista said ISS had refused to engage with the company on the CSG transaction, and added its report did not provide a "full and fair recommendation" to the stockholders.
Earlier this week, Vista had rejected MNC Capital's buyout offer of $3.2 billion, and agreed to CSG's increased bid for its ammunition unit, called the Kinetic Group.
The company had said it expects the deal to close this month and has urged shareholders to vote for the merger with CSG at the special meeting scheduled to be held virtually on July 23.
Vista has maintained that MNC's offer undervalues its performance gear business, named Revelyst, and added in a letter to stockholders on Wednesday it may consider pursuing strategic alternatives for the unit at the "appropriate" time and valuation.
The Federal Ammunition and Remington Ammunition owner also said a vote against the CSG deal at the special meeting would not mean the company's board would negotiate with MNC Capital.
MNC Capital did not immediately respond to a Reuters request for comment.
ISS had previously recommended Vista shareholders to abstain from voting on a proposed merger during the special meeting.
On closing of the CSG deal, which has received regulatory approval from an interagency committee of the U.S. government, Vista's stockholders will receive one share of Revelyst common stock and $21 in cash apiece.
Reporting by Juveria Tabassum and Granth Vanaik in Bengaluru; Editing by Krishna Chandra Eluri
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