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Vista Outdoor’s second-largest active shareholder, Gates Capital Management, announced it is opposing the $2.1 billion sale of The Kinetic Group to foreign-based Czechoslovak Group (CSG), citing a better all-cash offer.

Vista was set to approve the sale of its ammunition company to CSG after the Committee on Foreign Investment approved the deal on June 25, but now the support for the sale is up in the air. Gates Capital Management announced that it believes the sale of the entirety of Vista to U.S.-based MNC Capital would best benefit shareholders.

"We believe that the $42 per share bid from MNC Capital to acquire all of Vista provides a reasonable starting point for Vista to negotiate a superior transaction versus the current CSG proposal," Gates Capital Management said in a press release.

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On top of the option to sell to MNC, Gates Capital Management would also support Vista’s original plan of a tax-free spin-off separating The Kinetic Group from the outdoor branch Revelyst to consider what is in the best interest of Vista’s shareholders.

Currently, MNC has an all-cash offer of $3.2 billion on the table for Vista. The potential buyer has been adamant since making the offer that this is the final revised proposal it will make. MNC says its offer is roughly $700 million above Vista's market value the day before its first offer.

Remington 223 caliber cartridges. (Silas Stein/picture alliance via Getty Images / Getty Images)

Despite MNC offering a larger package, Vista remains committed to only selling its ammunition company as it looks to grow the outdoor brand.

"MNC’s Final Indication significantly undervalues Vista Outdoor as a whole and especially the Revelyst business," Vista said in a press release earlier this month.

On top of Gates Capital Management’s opposition to the sale to CSG, third-party consultant group ISS said it is reversing its decision to support the sale of the Kinetic Group to CSG. However, another third-party consultant group, Glass Lewis & Co., recommended the sale to the foreign company.

In the report obtained by FOX Business, ISS said that Vista’s justifications for rejecting continued to change over time. ISS acknowledged there are concerns about MNC but explained it could have been solved upon continued communication.

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"There are some lingering concerns about MNC’s limited public engagement and the fact that its offer remains subject to due diligence… It is also reasonable to assume that these issues might have been addressed had the company re-engaged with MNC after June 26."

Glass Lewis said in an updated report that following CSG’s improved offer of $2.1 billion, it feels it’s "the best option to maximize shareholder value" pending an improved offer from MNC.

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"The support of Glass Lewis reaffirms our conviction that the pending transaction with CSG is in the best interest of Vista Outdoor stockholders," Vista said in a statement on Thursday.

Vista is scheduled to hold its shareholders meeting on July 23 to vote on the sale of The Kinetic Group to CSG.