US: Bass Pro Shops hooks Cabela’s in $5.5 billion deal

Bass Pro Shops said on Monday it will acquire Cabela’s for $5.5 billion, combining two meccas for outdoor enthusiasts, even as the deal may face antitrust scrutiny given that the hunting and fishing retailers overlap in several US states.

The deal, first reported by Reuters, will combine Cabela’s 85 stores, which have a stronger US Northwest presence, with Bass Pro’s roughly 100 stores that are concentrated in the US Southeast.

Their overlap in Texas, Missouri and Kansas will likely raise antitrust concerns.

“Both Cabela’s and Bass Pro Shops used promotions to drive store traffic and market share, especially in contested geographic regions. As a combined entity, we see potential for a more rational promotional environment to emerge, benefiting all industry participants, “D. A. Davidson & Co said in a research note.

Cabela’s had said it would explore a sale last December after pressure from activist hedge fund Elliott Management Corp, which said the shares were undervalued.

Cabela’s shares ended up 15 percent at $63.18 on the New York Stock Exchange, close to the $65.50 per share in cash that the deal with Bass Pro values the company.

Full Content: Reuters

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