Bass Pro Shops 'Reels In' Cabela's with $5.5 Billion Deal

Cabela's agrees to be bought by Bass Pro Shops in a deal valued at $5.5 billion that will combine the top two hunting and fishing retailers in the United States

Bass Pro Shops 'Reels In' Cabela's with $5.5 Billion Deal
A customer looks through the in-store sales advertisements inside a Cabela's store on "Black Friday" in Fort Worth, Texas. (Reuters/Jessica Rinaldi photo)

(Reuters) - The deal, first reported by Reuters, will combine Cabela's 85 stores, which have a stronger U.S. Northwest presence, with Bass Pro's roughly 100 stores that are concentrated in the U.S. 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 promotionalenvironment to emerge, benefiting all industry participants, "D. A. Davidson Co said in a research note.

Cabela's had said it would explore a sale last December after pressure from 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 now 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, Nebraska-based Cabela's and Springfield, Missouri-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 itsrestaurants and visit its shooting ranges.


The companies have at times also 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 still owns a majority of Bass Pro, will be chief executiveof 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'scustomers.


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.

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

(Additional reporting by Michael Flaherty and Lauren Hirsch in New York; Editing by Bernard Orr)

GET THE NEWSLETTER Join the List and Never Miss a Thing.

Recommended Articles

See More Recommendations

Popular Videos

New Spinning Reel for Finesse Fishermen

New Spinning Reel for Finesse Fishermen

As Pure Fishing's Andrew Upshaw explains, reel making giant Abu Garcia has done it again at ICAST 2019 with a new spinning reel geared towards finesse fishermen.

Lure Lock Options Includes LED Light Boxes & More

Lure Lock Options Includes LED Light Boxes & More

Pro angler Jonathan VanDam showcases new offerings at ICAST 2019, including the ultra-thin, big bait boxes, LED-lighted boxes and backpack-able gear lockers. With Game & Fish Editorial Director Adam Heggenstaller at ICAST 2019 in Orlando.

Minn Kota's Brad Henry shows OSG's Lynn Burkhead that there's much to like in the new Minn Kota Riptide Terrova saltwater trolling motor that comes with I-Pilot and an 87-inch shaft.

Simms

Simms' Solarflex Ultra Cool Armor Hoody

John Frazier of Simms Fishing Products helps OSG's Lynn Burkhead understand the new features of the new Simms' Solarflex Ultra Cool Armor sun protection hoody.

See More Popular Videos

Trending Articles

While catfish are still catfish, the difference between day and night tactics and strategies can be profound, even when fishing the same lake or river. Catfish

How to Catch Catfish Day and Night

Terry Madewell - April 04, 2018

While catfish are still catfish, the difference between day and night tactics and strategies...

As most catfish anglers know, blue cats, channel cats and flatheads will eat darn near anything that fits in their mouths. Catfish

5 Ways To Catch Catfish on Lures

Keith Sutton - September 16, 2015

As most catfish anglers know, blue cats, channel cats and flatheads will eat darn near...

While wildly popular amongst anglers around the world, the IGFA World Record book shows the biggest pike come from Europe. Records

Top 10 Biggest Pike World Records of All Time

Jack Vitek - August 19, 2015

While wildly popular amongst anglers around the world, the IGFA World Record book shows the...

If you haven't looked at the smaller urban lakes in your area, you are missing out on some great bass pond fishing. Bass

Bass Pond Fishing: Catch Lunkers at Small Lakes Near You

Dan Anderson

If you haven't looked at the smaller urban lakes in your area, you are missing out on some...

See More Trending Articles

GET THE MAGAZINE Subscribe & Save

Digital Now Included!

SUBSCRIBE NOW

Give a Gift   |   Subscriber Services

PREVIEW THIS MONTH'S ISSUE

GET THE NEWSLETTER Join the List and Never Miss a Thing.