Bass Pro Shops to Bid for Cabela’s

Reuters news agency is reporting that Bass Pro Shops has partnered with a private equity arm of Goldman Sachs Group (a multinational investment banking firm) to make an offer for Cabela’s. The unidentified sources are “people familiar with the matter.”

According to Reuters, “The move gives Bass Pro the equity financing necessary to pursue Cabela’s and makes such a deal more likely, given the potential cost savings and synergies a combination of the two U.S. hunting and fishing retailers would bring.”

Bass Pro and Cabela’s are generally regarded as the number one and number two big box outdoor retailers in North America. Together they would form a giant worth upwards of $7 billion.

But Bass Pro is not alone in its interest in Cabela’s. Other buyout firms are also interested, and Cabela’s has been working with Guggenheim Securities LLC (an investment bank) to find a buyer since last fall. That effort was precipitated by pressure from Elliott Management Corp. (an activist hedge fund). Cabela’s has also considered selling its beleaguered credit card business separately. Although that branch of the operation has suffered seven-figure fines for improprieties in recent years, it may constitute a third of the company’s overall value.

Whatever transpires, this process is in its early stages and much must be done before a deal is finalized.

Just how such a purchase would affect the outdoors industry has been the subject of much speculation since FTR first reported this story last fall. The consensus is that it would give Bass Pro Shops unprecedented leverage and buying power with manufacturers, though little would likely change for consumers.

Industry insiders have also speculated that Bass Pro would not rebrand the Cabela’s stores, but would retain that brand where it has marketing value. That’s how the acquisition of Ranger, Stratos and Triton boat companies was handled after their purchase by Bass Pro Shops in 2014.