Recently, Bass Pro Shops came to an agreement to purchase their outdoor retail rival Cabela’s in a deal worth $5.5 billion.
At first, it wasn’t clear if the deal would cause store closures. However, the companies said that their Bass Pro Shop in Springfield, Mo. will be growing the Cabela’s brand.
When Elliott Management declared that the outdoor retailer was trivialized, they asked them to consider a reorganization or sale. The deal comes about ten months after Sidney, Neb. Cabela’s effectively put itself up for sale.
Private Bass Pro Stores will be paying $65.50 a share for Cabela’s, with a 19.2% premium over Friday’s price.
Their shares also increased 14.7% in market trading to $62.99 Monday.
Cabela’s lost ground to online retailers and smaller competitors. Compared to a year earlier, stores open at least a year fell in sales by 1.3% during the first half of the year.
The amount of Cabela’s purchases fell 8.1% during that time, reflecting lower foot traffic as customers bought less footwear and clothing. However, hunting sales rose, and average revenue increased 8.2%.
The purchase deal marks the expansion of the outdoor retail market controlled CEO Johnny Morris with Bass Pro. Morris started the business in 1972. The billionaire will retain majority ownership and will lead the new entity as CEO.
Bass Pro Shops has over 20,000 workers and 99 stores. In 2015, Cabela’s had 85 stores and 19,700 workers.
However, Tommy Millner, Cabela’s CEO, said after much review, the board had unanimously supported the sale.
Bass Pro Shops plans to maintain Cabela’s operations in Sidney and Lincoln, Neb.