Responding to yesterday’s press release by Global Digital Solutions of their intent to offer $1.082 Bn cash for Remington Outdoor Company, Freedom Group Inc CEO George Kollitides issued an internal memo to employees calling the announcement a “publicity stunt”. The memo was obtained by Grandview Outdoors and published in part on their site.
“A small, unknown investment entity publicly announced its desire to acquire the Remington Outdoor Company,” the memo obtained by Grand View Outdoors says. “If this wasn’t disruptive to our employees and customers, we would not acknowledge the news and recognize it for what it is: a publicity stunt from an agenda-driven group with no credible financing options.”
There are a few interesting point to ponder.
First, that’s a lot of cash for a relatively unknown company and their technology thrust areas aren’t exactly mainstream firearms. Leaving me scratching my head last night when I initially read the press release. Corrected PR states cash and common stock.
Second, GDSI claims to have filed a Form 8-K and announced an Unsolicited Letter of Intent to Acquire Remington Outdoor Company (aka Freedom Group) for $1.082 Billion. You don’t play around with the SEC. So if GDSI did file it, it means they have to mean it, or face trouble. And if they didn’t file it, they may get in hot water over saying they did.
Third, the GDSI announcement went out via PRnewswire and was picked up by the main stream media. This didn’t go out like an industry rumor. The GDSI CEO actually went on record about financial issues. Lying about this is something the SEC doesn’t take lightly.
Finally, the sections of the internal Remington memo we have seen, never says GDSI’s claim is untrue. Rather, it calls the announcement a “publicity stunt”. The info that is out there wasn’t released officially but leaked to a firearms centric site and not the main stream media. That’s pretty interesting considering last we had heard the whole kit and caboodle was for sale and Kollitides was working with some other Remington employees to raise the cash to purchase it themselves. Maybe someone spoke too soon? Of course, sometimes filing time is filing time.
All we have to go on is what has been leaked. So far, we haven’t seen any definitive statement to the public from Remington/FGI regarding the situation. This leaves serious analysts questioning the entire situation and leads me to believe someone is being less than truthful. The question is, which party?
UPDATE – PRnewswire has issued a correction of yesterday’s press release at the request of GDSI.
In the news release, Global Digital Solutions Files Form 8-K, Announces Unsolicited Letter of Intent to Acquire Remington Outdoor Company, with Estimated Annual Sales of $1.25 Billion and a Purchase Price of Approximately $1.082 Billion, issued 11-Mar-2014 by Global Digital Solutions, Inc. over PR Newswire, we are advised by the company that the first paragraph, second sentence, should read “GDSI has made an unsolicited offer to purchase Freedom for $1.082 billion in cash and shares of GDSI’s common stock,” rather than “GDSI has made an unsolicited offer to purchase freedom for $1.082 billion in cash,” as issued inadvertently.”
Read the SEC filing here secfilings.nasdaq.com. Interesting. It was an unanswered, unsolicited proposal but I would have expected FGI to disavow this as an unacceptable offer at this point.