ShareThis Page
Business Headlines

Outdoor giant Bass Pro to acquire rival Cabela's for $4.5B

| Monday, Oct. 3, 2016, 11:06 a.m.
In this Wednesday, April 15, 2015, file photo, a large crowd of people line up as they wait for the grand opening of Bass Pro Shops Outpost store in Atlantic City, N.J.
In this Wednesday, April 15, 2015, file photo, a large crowd of people line up as they wait for the grand opening of Bass Pro Shops Outpost store in Atlantic City, N.J.
In this Wednesday, Feb. 17, 2016, file photo, statues of wildlife adorn the entrance to a Cabela's store in LaVista, Neb.
In this Wednesday, Feb. 17, 2016, file photo, statues of wildlife adorn the entrance to a Cabela's store in LaVista, Neb.

Bass Pro Shops said Monday that it will acquire Cabela's Inc. for $5.5 billion, combining two meccas for outdoor enthusiasts, even as the deal may face antitrust scrutiny given that the hunting and fishing retailers overlap in several states.

The deal, first reported by Reuters, will combine Cabela's 85 stores, which have a stronger Northwest presence, with Bass Pro's roughly 100 stores that are concentrated in the Southeast.

Their overlap in Texas, Missouri and Kansas will likely raise antitrust concerns.

“Both Cabela's and Bass Pro Shops used promotions to drive store traffic and market share, especially in contested geographic regions. As a combined entity, we see potential for a more rational promotional environment to emerge, benefiting all industry participants,” D.A. Davidson & Co said in a research note.

Cabela's had said it would explore a sale in December after pressure froms activist hedge fund Elliott Management Corp., which said the shares were undervalued.

Cabela's shares ended up 15 percent at $63.18 on the New York Stock Exchange, close to the $65.50 per share in cash that the deal with Bass Pro values the company.

Elliott stands to make a profit of $419.2 million, nearly double what it paid to buy an 11.1 percent stake in the company, according to regulatory filings.

Sydney, Neb.-based Cabela's and Springfield, Mo.-based Bass Pro have been serving outdoor enthusiasts since their respective foundings in 1961 and 1971.

As the broader industry has struggled to compete with Internet retailers such as Amazon.com Inc., Bass Pro and Cabela's have been targeting customers seeking a one-stop shop for entertainment, expert advice and shopping.

Cabela's has grappled with declining sales of apparel and footwear and has reported same-store sales growth in only one quarter in more than three years. Still, the company maintains a loyal following, with many customers willing to drive miles to shop at stores, as well as dine at its restaurants and visit its shooting ranges.

The companies have at times benefited from their significant hunting-gun businesses, but the industry has seen steep swings in sales amid uncertainty around gun law changes.

Both companies are closely associated with their founders, Johnny Morris at Bass Pro and Dick, Mary and Jim Cabela at Cabela's. Dick Cabela died in 2014 and was succeeded by his brother Jim as chairman of Cabela's.

Johnny Morris, who owns a majority of Bass Pro, will be chief executive of the combined company.

Cabela's also agreed to sell its credit card business called World's Foremost Bank to Capital One Financial Corp., which will forge a 10-year partnership with Bass Pro to issue credit cards to Cabela's customers.

Bass Pro will finance the acquisition through preferred equity financing commitments of $1.8 billion from Goldman Sachs Group Inc and $600 million from buyout firm Pamplona Capital Management.

JPMMorgan Chase & Co advised Bass Pro Shops and Guggenheim Securities advised Cabela's on the deal.

TribLIVE commenting policy

You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.

We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.

While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.

We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers

We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.

We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.

We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.

We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.

click me