Bass Pro to buy ri­val Ca­bela’s for $4.5 bil­lion

$4.5 bil­lion deal com­bines com­pa­nies known for their des­ti­na­tion su­per­stores

Daily Local News (West Chester, PA) - - FRONT PAGE - By Josh Funk AP Busi­ness Writer

OMAHA, NEB. >> Out­door gear gi­ant Bass Pro is snap­ping up ri­val Ca­bela’s in a $4.5 bil­lion deal an­nounced Mon­day.

Bass Pro is pay­ing Ca­bela’s share­hold­ers $65.50 cash per share, a 19 per­cent pre­mium to Fri­day’s clos­ing price. The com­pa­nies val­ued the deal at $5.5 bil­lion, which in­cludes debt. The deal com­bines two com­pa­nies known for their gi­ant des­ti­na­tion su­per­stores. Ca­bela’s store north of Read­ing draws from a wide ge­o­graph­i­cal area, in­clud­ing out­doors­men from Ch­ester County.

It also cre­ates un­cer­tainty about jobs in Ca­bela’s home state of Ne­braska. The com­bined com­pa­nies plan to keep some op­er­a­tions in Sid­ney and Lin­coln, Ne­braska, but it’s not im­me­di­ately clear how many jobs might be lost.

Ca­bela’s em­ploys about 2,000 peo­ple in the west­ern Ne­braska town of Sid­ney, which has about 7,000 res­i­dents. State Sen. Ken Schilz, who rep­re­sents the area, said the deal is con­cern­ing be­cause of the du­pli­ca­tion be­tween the two com­pa­nies’ head­quar­ters that will be elim­i­nated.

“We’ll just have to wait and see what Bass Pro does. I’m sure most folks in Sid­ney are pretty ner­vous this morn­ing,” Schilz said.

Ac­tivist in­vest­ment firm El­liott Man­age­ment be­gan push­ing for sig­nif­i­cant changes at Ca­bela’s last fall. El­liott owns 7.4 per­cent of Ca­bela’s shares and holds op­tions to buy an-

“The story of each of these com­pa­nies could only have hap­pened in Amer­ica, made pos­si­ble by our uniquely Amer­i­can free en­ter­prise sys­tem.” – Bass Pro founder and CEO Johnny Mor­ris

other 3.8 per­cent.

A sale of the Ca­bela’s has been a dis­tinct pos­si­bil­ity ever since the com­pany an­nounced a re­view of its strate­gic op­tions last De­cem­ber, but many in Sid­ney weren’t ready to be­lieve it could hap­pen.

“We’re just try­ing to ab­sorb it right now,” said Denise Wilkin­son, pres­i­dent

of the Cheyenne County Cham­ber of Com­merce. “We just never knew what would hap­pen.”

Bass Pro founder and CEO Johnny Mor­ris said he hopes to con­tinue grow­ing the Ca­bela’s brand along­side his pri­vately-held Spring­field, Mis­souri, based chain.

“The story of each of these com­pa­nies could only have hap­pened in Amer­ica, made pos­si­ble by our uniquely Amer­i­can free en­ter­prise sys­tem,” Mor­ris said. “We have enor­mous

ad­mi­ra­tion for Ca­bela’s, its founders and out­fit­ters, and its loyal base of cus­tomers.”

Cap­i­tal One will take over run­ning Ca­bela’s credit card unit as part of the deal, which is backed by $1.8 bil­lion in fi­nanc­ing from Gold­man Sachs and an­other $600 mil­lion from pri­vate eq­uity fund Pam­plona Cap­i­tal.

Ca­bela’s was founded in 1961 when Dick Ca­bela started sell­ing fish­ing flies through the mail from his kitchen ta­ble with his wife,

Mary, and brother, Jim. It now has 85 re­tail stores pri­mar­ily in the west­ern U.S. and Canada.

Bass Pro got its start in 1971 when Mor­ris be­gan sell­ing high-qual­ity fish­ing tackle in his dad’s liquor store in Spring­field, Mis­souri.

Mor­ris de­vel­oped a fol­low­ing in the Ozarks re­gion — its lakes and rich streams a haven for an­glers — cre­ated the Bass Pro Shop Cat­a­log in 1974 and opened the first of his now 99 stores in Spring­field seven years later. Bass Pro’s stores are mostly in the east­ern United States and Canada.

Mor­ris also in­tro­duced the Bass Tracker fish­ing boat in 1978 that was de­signed specif­i­cally for fish­er­men. That led to the cre­ation of the White River Ma­rine Group.

Ne­braska politi­cians are en­cour­ag­ing Bass Pro to main­tain sig­nif­i­cant op­er­a­tions in the state af­ter the deal closes some­time in the first half of next year.

“I know from per­sonal ex­pe­ri­ence that when you hire Ne­braskans you get in­di­vid­u­als who are well-ed­u­cated, have a great wor­kethic, and will make your com­pany suc­ceed,” said Gov. Pete Rick­etts, the for­mer TD Amer­i­trade ex­ec­u­tive.

U.S. Rep. Adrian Smith said Ca­bela’s has long been “a cor­ner­stone of west­ern Ne­braska’s econ­omy.”

Ca­bela’s shares climbed $8.19, or 14.9 per­cent, to $63.12 in af­ter­noon trad­ing Mon­day.

THE ASSOCIATED PRESS

Stat­ues of wildlife adorn the en­trance to a Ca­bela’s store in LaVista, Neb. Out­door gear giants Bass Pro and Ca­bela’s will com­bine in a $4.5 bil­lion deal an­nounced Mon­day.

THE ASSOCIATED PRESS

Peo­ple line up as they wait for the grand open­ing of Bass Pro Shops Out­post store April 15, 2015, in At­lantic City, N.J.

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