About 10 months after Sidney, Neb.-based Cabela’s effectively put itself up for sale at the urging of hedge fund Elliott Management, privately held Bass Pro Shops will pay $65.50 per share in cash for Cabela’s, representing a premium of 19.2% over Friday’s closing price. No word yet if there will be store closing resulting from the merger, but the companies said in a statement that Springfield, Mo.-based Bass Pro Shops would “celebrate and grow” the Cabela’s brand.
Bass Pro Shops currently operates about 100 stores with 20,000 employees. Cabela’s has about 85 stores and had about 19,700 employees at the end of 2015, according to securities filing. Sales at Cabela’s stores open at least a year fell 1.3% in the first half of 2016, compared to a year earlier.
Bass Pro Shops said it plans to maintain Cabela’s operations in Sidney and Lincoln, Neb. “and hopes to continue the very favorable connections to those communities and the Cabela’s team members residing there.”
“Today’s announcement marks an exceptional opportunity to bring together three special companies with an abiding love for the outdoors and a passion for serving sportsmen and sportswomen,” said Johnny Morris, the chief executive of Bass Pro Shops. “The story of each of these companies could only have happened in America, made possible by our uniquely American free enterprise system.”
Morris will continue as chief executive and majority shareholder of the company.
Bass Pro Shops will also take on a partnership with Capital One Financial Corporation to originate and service Cabela’s co-branded credit card. Right before the closing of the transaction, Capital One will acquire some assets and liabilities of Cabela’s World’s Foremost Bank; the cash from this transaction will stay on Cabela’s balance sheet until it’s acquired by Bass Pro Shops.
Shares of Cabela’s jumped nearly 15 percent to $63.00 in morning trading, their highest in more than a year. Up to Friday close, they had risen 17 percent since the company said it was exploring strategic alternatives.
Bass Pro Shops will finance the deal through preferred equity financing commitments of $1.8 billion from Goldman Sachs and $600 million Pamplona Capital Management.
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