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:VSTO) for $2.9 billion including debt, it said on Friday, challenging Vista's planned 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 offer price is a premium of nearly 17% to Vista stock's Feb. 16 closing price.
Shares of Vista rose about 5% to $32.78 in early trading on Friday.
The company separately said on Friday that its board is reviewing the offer and it has not changed its recommendation in support of the acquisition of its sporting products business by Czechoslovak Group (CSG).
Vista is in the midst of a planned sale of its sporting goods business to the privately-held Czech defence and civil manufacturing company in a $1.91 billion deal announced last October.
Vista’s sporting goods unit includes its ammunition brands which count law enforcement officers and the military as customers.
MNC said that its deal would keep Vista under U.S. ownership and would not pose a national security risk nor require a review by the Committee on Foreign Investment in the United States (CFIUS), unlike CSG which is awaiting CFIUS approval.
MNC Capital’s Mark Gottfredson sat on Vista’s board until he resigned in January. MNC plans to fund the deal with $1.5 billion of equity and $1.4 billion of debt. The equity partners include several wealthy families in 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 gunmaker Colt CZ Group for a cash-and-stock merger offer.
But Vista rejected the offer, saying it undervalued the company and was not better for shareholders than a rival bid, and maintained selling its sporting division to CSG. Colt's offer valued Vista at about $1.7 billion back in November.
The company has a market capitalization of $1.82 billion as of Thursday's close.