Outdoors goods retailer Bass Pro Shops wins bid for rival Cabela's for $5.5 bn

US outdoor recreation goods retailer Bass Pro Shops yesterday struck a deal to buy its rival Cabela's Inc for $5.5 billion.

Privately-held Bass Pro Shops will pay $65.50 per share in cash, a premium of 19.2-per cent over Cabela's Friday's closing price.

The sale of Nebraska-based Cabela's comes nearly a year after New York hedge fund and activist investor Elliott Management Corp, which holds an 11-per cent stake, forced the company to explore strategic alternatives, including a potential sale.

The sale will see Elliott reaping a profit of around $420 million, nearly double what it paid to buy its stake over a period of a year.

Post closing, Bass Pro Shops will 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's customers.

Bass Pro Shops Bass Pro will fund the acquisition through preferred equity financing commitments of $1.8 billion from the Merchant Banking Division of Goldman Sachs and $600 million from buyout firm Pamplona Capital Management.

Founded by Dick, Mary and Jim Cabela in 1961 as a home-based catalog business, Cabela's is now a leading specialty retailer, and the world's largest direct marketer of hunting, fishing, camping and related outdoor merchandise with annual revenues of around $3.6 billion.

The Nebraska-based company operates 85 specialty retail stores, primarily in the western US and Canada and employs over 19,000 people.

Cabela's stores, catalog business and e-commerce operations will merge with Bass Pro Shops and its subsidiary White River Marine Group.

Founded in 1972 by avid young angler Johnny Morris, Bass Pro Shops, is a leading national retailer of outdoor gear and apparel, with 99 stores and Tracker Marine Centers located primarily in the eastern part of the US and Canada.

Morris started the business with eight square feet of space in the back of his father's liquor store in Missouri, the company's sole location for the first 13 years of business.

Bass Pro Shops also operates Big Cedar Lodge - America's Premier Wilderness Resort, employs around 20,000 people and has an annual turnover of around $4.3 billion.

"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, founder and CEO 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. We have enormous admiration for Cabela's, its founders and outfitters, and its loyal base of customers. We look forward to continuing to celebrate and grow the Cabela's brand alongside Bass Pro Shops and White River as one unified outdoor family,'' he added.

"Cabela's is pleased to have found the ideal partner in Bass Pro Shops," said Tommy Millner, Cabela's CEO. "Having undertaken a thorough strategic review, during which we assessed a wide variety of options to maximize value, the Board unanimously concluded that this combination with Bass Pro Shops is the best path forward for Cabela's, its shareholders, outfitters and customers.''