Bass Pro to acquire Cabelas Inc for $5.5 billion


Cabelas Inc (NYSE:CAB) shares jumped more than 15 percent on Monday following the news that Bass Pro Shops has decided to acquire Cabela in a transaction valued at $5.5 billion. The deal will combine Bass Pro’s nearly 100 stores with Cabela’s 85 stores.

Last year, the Sidney, Nebraska-based company had said it would explore a sale following pressure from activist hedge fund Elliott Management, which holds about 11.1 percent stake in the company.

Cabela is a specialty retailer of camping, fishing, boating, hunting and associated outdoor products. It has been dealing with dropping sales of footwear and apparel over the past couple of years. Nevertheless, the company has loyal customer base, who are willing to purchase goods from the retailer even if the stores are far away.

Bass Pro’s founder Johnny Morris will be the new chief executive officer of the joint company. Bass Pro will fund the deal through $1.8 billion preferred equity financing commitments from Goldman Sachs and $600 million from Pamplona Capital Management.

Cabelas shares ended the day at $63.18 in the last trading session. The stock has surged over 35 percent so far this year, including Monday’s gain. The 52-week range of the stock is $33.03-$63.24. The company’s market cap is $4.44 billion.