When news broke last week of Bass Pro Shops' acquisition of its main rival, Cabela's (NYSE: CAB), the latter's stock price sat at about $55. By the end of trading last Monday, the price had jumped 15 percent to $63.13.
The megadeal between two goliaths of the outdoor-retail industry will result in one giant company operating 184 stores. Bass Pro also owns White River Marine Group, a boat retailer responsible for such brands as Tracker Boats, Sun Tracker, Nitro, Tahoe, Regency, Mako, Ranger, Triton and Stratos.
“Cabela’s is pleased to have found the ideal partner in Bass Pro Shops,” said Tommy Millner, Cabela’s chief executive officer, in a news release. “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.
“In addition to providing significant immediate value to our shareholders, this partnership provides a unique platform from which our brand will be extremely well positioned to continue to serve outdoor enthusiasts worldwide for generations to come.”
Assuming the transaction passes muster with federal regulators, Bass Pro Shops founder and CEO Johnny Morris will continue as CEO and majority shareholder of the new entity, which will remain a private company. Bass Pro said it intends to continue to maintain Cabela’s bases of operation in Sidney, Neb., and Lincoln, Neb., and “hopes to continue the very favorable connections to those communities and the Cabela’s team members residing there.”
“This opportunity would not be possible without the contributions of the many wonderful Cabela’s, Bass Pro Shops and White River team members,” Morris said. “All three companies are blessed to have been built by the extraordinary efforts of many tremendously talented, dedicated people throughout our respective histories, and we’re thrilled to consider what the combined team can achieve going forward.”
Customer loyalty programs and credit cards at each of the retailers is one area that many customers will no doubt have questions about. It sounds as though the programs, for the time being, will remain the same, but may soon be honored at both chains.
Following the closing of the transaction, Bass Pro Shops intends to celebrate and grow the Cabela’s brand, according to the release, and “will build on qualities that respective customers love most about Cabela’s and Bass Pro Shops.”
In addition, the release said Bass Pro Shops “recognizes the strength of Cabela’s CLUB Loyalty program and intends to honor Cabela’s customer rewards and sees potential over time to expand the program in the combined company.”
Upon closing the deal, Bass Pro Shops said it will commence a multi-year partnership agreement with Capital One, under which Capital One will “originate and service the Cabela’s CLUB, Cabela’s co-branded credit card,” and that Bass Pro Shops will maintain a seamless integration between the credit card program and the combined companies’ retail operations and customer relationships.
The company said Cabela’s CLUB points and Bass Pro Shops Outdoor Rewards points will be unaffected by the transactions and customers can continue to use their credit cards as they were prior to the transaction. Capital One said it intends to continue to operate the Cabela’s CLUB servicing center in Lincoln, Neb., as well.
There has been no information released so far about potential layoffs or store closings, and Bass Pro stated on its website that things would be “business as usual” for the companies. With the stores in Olathe and Kansas City, Kan., so close to each other, we’ll have to wait to see if one of those outlets closes operations in favor of the other sometime in the future or if they both remain despite being in competing markets.