Hunting and fishing company
Bass Pro Shops, which was started nearly five decades ago when billionaire Johnny Morris started selling fishing lures out of his dad’s liquor store, has agreed to pay $65.50 per share for Cabela’s. This represents a 19% premium over Friday’s closing price.
Cabela’s had been exploring strategic alternatives for its business after coming under pressure from activist investor Paul Singer’s Elliott Management, which took a position in the company a year ago and called its stock undervalued.
The deal will create an outdoor retailing giant with almost double the store count that sells fishing, hunting, camping and boating gear. Both companies have “an abiding love for the outdoors and a passion for serving sportsmen and sportswomen,” said Morris, founder and CEO of the privately-held Bass Pro Shops, who Forbes estimates is worth $3.9 billion.
Cabela’s, which was founded in Sidney, Nebraska in 1961, has struggled in recent times and saw sales at its existing stores fall 1.3% in the first half of 2016. The company attributed this to a decrease in demand for its clothing and footwear.
Under the newly combined company, Morris will continue to act as CEO and majority shareholder. Bass Pro Shops communicated its plans to retain Cabela’s operations in its home state, but it’s not immediately clear if jobs will still be lost.
Bass Pro Shops is acquiring outdoor gear competitor Cabela’s in an all-cash deal valued at $5.5 billion, the companies said on Monday.