Vista backs Czechoslovak Group's $2 billion latest sweetened offer for sporting unit

(Reuters) -Vista Outdoor has agreed to sell its sporting products and ammunition business to Czechoslovak Group (CSG) for about $2 billion, the company said on Monday, after the Prague-based defense firm raised its offer for a second time.

The unit, which houses brands such as Federal Ammunition and Remington Ammunition, has been the target of multiple bidders due to rising demand for military supplies since Russia's invasion of Ukraine.

The new proposal increases the cash consideration payable by $2.00 per share to $18.00, a 12.5% increase, Vista said on Monday.

The company, which has rejected investment firm MNC Capital's offer to buy the entire business for more than $3 billion, will also return an additional $77 million of excess cash to stockholders as part of the latest CSG plan.

Vista has urged its shareholders to vote in favor of the revised transaction with CSG. Its shares were up 2.4% at $34.96.

Privately held CSG raised its offer to acquire the unit, called Kinetic Group, in May to $1.96 billion from the $1.91 billion it initially made in October.

Vista had in 2022 announced plans to split its outdoor and sporting products units into two separate companies. Post the completion of the separation, the company would re-brand itself as the Kinetic Group.

Investment firm MNC Capital disclosed an interest to acquire the entire company, including its performance gear business Revelyst, in March. However, Vista has rejected the proposals after engaging for months with the firm.

Proxy advisory firm Institutional Shareholder Services (ISS) had last week also recommended shareholders to abstain from the proposed merger with CSG and give more time to solicit engagement with MNC Capital.

MNC Capital declined to comment, while ISS did not immediately respond to a request for comment on Monday.

Vista had last week said that possible pressure from MNC had forced one of the bidders for the Kinetic Group to drop its $2 billion offer.

(Reporting by Granth Vanaik in Bengaluru; Editing by Shailesh Kuber and Sriraj Kalluvila)