(Reuters) -Vista Outdoor said on Tuesday it had agreed to sell its sporting products business to Czechoslovak Group (CSG) for $1.96 billion, after the Prague-based defense firm raised its offer to acquire the unit from the company.

The sporting and outdoor company, separately, rejected an unsolicited proposal to be acquired from MNC Capital, after it pushed in recent months for the investment firm to raise its offer, citing an undervaluation of its performance gear business.

Vista was already in talks to sell its sporting goods unit, which includes its ammunition business, to privately held CSG which had offered to buy the business for $1.91 billion.

The company said that CSG was increasing its cash consideration payable to Vista shareholders by $3.10 per share of Vista's common stock to $16.00, a 24% increase.

"Some investors may be either be reluctant or prohibited from owning an ammunition business for various reasons ... so by splitting the company up, Vista Outdoor believes that Revelyst will garner higher valuation multiple and the value of both companies can be better maximized," James Chartier analyst at Monness, Crespi, Hardt & Co said.

The transaction is expected to close in 2024 subject to approval of Vista Outdoor's stockholders and receipt of clearance by the Committee on Foreign Investment in the United States.

Additionally, Vista said it will return to its stockholders about $130 million of excess cash as well as the $50 million increase it receives from CSG after the revised offer.

Shares of Vista Outdoor were marginally up in early trade at $35.01.

(Reporting by Granth Vanaik and Anuja Bharat Mistry in Bengaluru; Editing by Savio D'Souza and Vijay Kishore)