Nearly 2,000 jobs in the Panhandle town of Sidney are on the line if Bass Pro Shops makes a bid for local retailer Cabela’s. Two national newswires reported late Sunday that Missouri-based Bass could make an offer as soon as Monday.
If so, Wall Street watchers say Bass Pro could move to consolidate the operations of the merged companies — likely choosing its current Springfield, Missouri, home office as the combined company’s headquarters. That would mean an ax could drop on 2,000 Cabela’s headquarters workers in Sidney, a town of 6,800 about six hours west of Omaha.
"The most obvious place to look for synergies is reducing two headquarters to one," Don Bilson, an analyst with New York investor research firm Gordon Haskett told The World-Herald earlier this year, using a Wall Street term for combining two parts of a company into a stronger single entity.
The Reuters and Bloomberg newswires reported Sunday that sources close to the matter, which neither wire identified, said Bass Pro, which would work with an arm of the Goldman Sachs investment bank and credit card behemoth Capital One, would soon make a bid for the Nebraska retailer. That group looks to have beat out another investor consortium that was in the running for Cabela’s, a team of credit-card issuer Synchrony Financial and private-equity firm Sycamore Partners, the wires reported.
Reuters said Cabela’s could draw a $4 billion bid. That deal likely would include the firm’s lucrative credit-card operation, which issues the Cabela’s Club card.
Cabela’s and Goldman declined to comment; Capital One and Bass Pro didn’t immediately respond to requests for comment.
The Nebraska outdoors retailer has been under pressure for about a year since New York hedge fund and activist investor Elliott Management announced an 11 percent stake in Cabela’s and said it would press for big changes — including the sale of all or parts of the company.
Cabela’s has steadfastly maintained its silence in the wake of the activist stake. Elliott also hasn’t commented. But investors have been anticipating something big: The retailer’s stock, which had fallen 37 percent in 2015 until the time Elliott announced its stake in October of that year, has gained about 25 percent over the past year as stock buyers have scooped up Cabela’s with the idea that more profits could soon be squeezed out.
Homegrown Cabela’s has a similar origin story to Bass Pro Shops. The Sidney business was founded in 1961 by Dick and Mary Cabela as a home-based catalog business, after Dick Cabela’s effort to sell fishing lures in his father’s furniture store failed. Jim Cabela, Dick’s brother, still serves as company chairman. He couldn’t be reached on Sunday.
Bass was started in 1971 by Johnny Morris, who sold fishing tackle out of his father’s liquor store, according to the company.
Bass Pro might likely has seen the dust-up with the activist investor as an opportunity to take out one of its stiffest competitors.
"If Bass Pro buys, the people in Sidney may have reason to wring their hands," Jim Zipursky, managing director in Omaha of Corporate Finance Associates MidWest, a company that handles mergers and acquisitions, told The World-Herald earlier this year.