Bass Pro Shops Buying Cabela's?

By author of The Duck Blog

Reports Say Giant Outdoor Retailer Looks to Purchase Main Competition

It might be the hunting and fishing equivalent of Coke buying Pepsi.

According to several reports, outdoor retail titan Bass Pro Shops is exploring a bid for Cabela’s Inc., its top competitor. The story was first reported Nov. 5 by Reuters news service, which said Bass Pro is working with an investment bank on a potential offer. Cabela’s, meanwhile, also began to explore options and had contacted private equity firms to solicit interest.

“We are aware of recent media speculation, and our policy is not to comment on market rumors,” a Bass Pro spokesperson told the Omaha World-Herald.

Bass Pro Shops, privately held and headquartered in Springfield, Mo., was founded in 1971 by John L. Morris, who initially sold fishing supplies out of the back of his father’s shop. In 2011, it had a reported revenue of about $3.83 billion and, in 2014, employed more than 20,000 people. It has more than 70 retail stores. Cabela’s, headquartered in Sidney, Neb., was founded in 1961 by Dick Cabela as a mail-order sporting goods business. Cabela’s brother Jim joined the business in 1963, and the company went public in 2004. As of 2015, it had about 64 retail stores, employed about 19,300 people and had about $3.65 billion in revenue.

The Omaha World-Herald article said Cabela’s had come under pressure from “activist investor” Elliott Management of New York, which said Cabela’s should consider selling itself or parts of its business. Reuters said that in October, Elliott had disclosed an 11 percent stake in Cabela’s.

Cabela’s stock increased sharply on the Nov. 5 Reuters report, gaining about 9 percent by that afternoon. Before the announcement, the World-Herald report said, Cabela’s stock had decreased about 37 percent in 2015.

The potential deal involves more than money, however, as the World-Herald article noted.

“Were Bass Pro to buy Cabela’s and consolidate staff in Springfield, Mo., … it could be devastating for Sidney,” it said. “Cabela’s employs about 2,000 people in the Sidney area, which has a population of about 6,800.”