Vista to raise ammo prices; CZ tenders unsolicited bid to buy Vista

[westernrover]

Vista Outdoors announced price increases they're claiming are necessary due to rises in supply-chain costs due to global demand for ammunition. Essentially, propellant manufacturers are seeing increased demand for military contracts and Vista will pass hiked prices onto consumers.

Vista includes Federal, CCI, Remington, Alliant Powder, SEVI-Shot and Speer and more. They've announced hikes:

• Shotshell: 1-7 percent
• Rifle: 1-7 percent
• Handgun: 1-5 percent
• 22LR/Shorts: 1-5 percent
• WMR/HMR: 1-7 percent
• Primers: 5 percent
• Alliant Powder: 10 percent

I think we can also expect shortages.

Also, I read that Colt/CZ made a competitive offer to buy Vista.

Vista had announced a plan to sell their ammo business (the "Sporting" division) to CSG for $1.9 Billion, but CZ is making a different offer. The "outdoor" (non-ammo) part of the business was also shaken up with the board tapping a former toy company exec to lead it. It will include RCBS and other less regulated gun-related brands.

What do you think of the possible future of Vista ammo under CSG or CZ? Are we headed for another round of extreme ammo shortage already?

 

[armoredman]

It depends COMPLETELY on if CZUB is in charge, or if they let Colt be in charge. CZUB will make Vista great...

 

[westernrover]

Well, Vista's board has rejected CZ's bid. They like the CSG deal they put together themselves better, even though CZ's offer was at a 16% premium. CZ's offer was something like $30/share. VSTO is trading at $27 today, but was much lower a month ago before everyone wanted to buy it.

CZ's offer, which only the board (not all shareholders) has rejected would keep Vista whole -- CZ would buy both the Outdoor and Sporting (ammo) divisions. The deal with CSG breaks up the ammo part from all the sporting goods (outdoor division) which Vista's board says increases the overall value. But the CSG offer was valued at $1.9B while the CZ offer has been valued by some at $2.6B and others at $1.74B. Because the transaction is in stock, people can think stocks are worth more or less than what they're currently trading for. CZ's offer also included financing (they would have to borrow the money to buy it), whereas CSG's offer was reported to be all-cash.

So what do you think of Vista's ammo business under CSG?

Shareholders are expected to vote in March or April.

 

[reddog81]

Why would we see an extreme ammo shortage? You think CZ wants To buy the company and shut down production lines?

 

[westernrover]

No. I suspect CZ would do well, but that it won't happen. Instead, the sale to CSG is more likely to go through. The shortage will be a result of Vista's long-standing refusal to expand capacity, their announcement to instead raise prices to bring demand down to match choked supply chains, and current management's anti-2A worldview, combined with continued increase in demand on suppliers from militaries and increasing demand from US consumers.

 

[ford8nr]

And you have an election cycle coming up.
Stack it high and deep while it's available a d relatively cheap.

 

[Mark_Mark]

Well, I’m not buying anything Vista till they figure out their issue. Got my primers set for the next downturn. Let Vista’s new European owners sweat a bit.

 

[mcb]

Not going to sweat it either way. I bought 1000 Federal Small Rifle Primers last week. That is the first box of primers I have bought since before the Covid pandemic. It is moderately worrisome that Winchester/Ohlin will be the only US owned primer manufactures selling to the public but there is nothing I can do to change that, so I will adapt and continue.

As for the price raise that simply seems to mirror what has been happening to inflation. The price of everything is going up, ammunition include.

As for shortages, buy when it's relatively cheap and stack it as deep as you can/want. I weather the last one without issues.

 

[Thomasss]

I've said it before, I am a very small stock holder and I am basically against the sale all together, I think Vista will have a rude awakening when they sell off this portion of the company. Vista has been drowning in cash since they took over Remington and now they want to sell it off??? The American government should be looking very closely at the sale, but then again Uncle Joe doesn't care and may even applaud the sale until the Fed wants to buy more ammo. Oops.