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• Colt's combination proposal values Vista Outdoor at $30 a share.
• It also includes a post-closing buyback programme of $900 million.
• Vista Outdoor stock is currently down over 20% versus its YTD high.

Vista Outdoor Inc (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.

Vista 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.

Choi Yun Jung VP of Vista Outdoor Inc. $VSTO just acquired 10K shares, growing their position by 100% https://t.co/UgKpyAGDcm

— X-Files Market Investigators (@market_x_files) November 17, 2023

On December 14^th, Vista Outdoor will present at the ROTH MKM 12^th Annual Deer Valley Event.

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