Bass Pro is moving forward in making a bid on its rival—with the help of Goldman Sachs. Reuters broke the news this week, reporting that sources say Bass Pro and Goldman Sachs Group’s private equity arm partnered up to make an offer for Cabela’s. The news almost instantly caused Cabela’s shares to jump 8.4 percent, ending up with a 6.4 percent increase to $52.51 on Tuesday. So far, both Cabela’s and Bass Pro Shops declined to comment on the issue.
Market analysts say that by working with Goldman Sachs, Bass Pro will have certainly have the ability to pursue the purchase of Cabela’s—but they are not the only ones. There are other entities interested in making bids on large outdoor retailer, and sources claim the process is still in its earliest stages. Officially, Cabela’s said last year that it will be working with an investment bank to explore its options, which may include an outright sale of the company, or just sections of it.
There is currently much speculation, and some concern, on how a sale would proceed. Cabela’s currently has 67 stores operating in North America and employs about 19,300 people. The outdoor retailer was originally founded as a mail-order business in 1961 by its namesake Richard Cabela. Cabela started the company with nothing more than $45 worth of fishing flies, and ran the business from his kitchen table with his wife. Due to incredible demand and its rising popularity, the company grew rapidly, eventually settling in a 50,000 square-foot facility in Sidney, Nebraska. The company’s sprawling headquarters remains in the city to this day.
Some observers say that should a sale to Bass Pro move forward, it is possible that Cabela’s infrastructure would remain more or less intact. The Cabela’s brand is very valuable and experts say that Bass Pro would be wise to preserve that. Leon Nicholas, senior vice president of Kantar Retail, a retail research and consulting firm, told the Omaha World Herald that Bass Pro may seek to keep Cabela’s headquarters operating. Residents of Sidney, where Cabela’s is one of the largest employers, certainly hopes the same.
“I think people are very optimistic that they’re going to stay, at least we are,” Dennis Denovellis, who owns a business in town, told the Herald. “We’ve been here a long, long time and they’ve been here a long, long time.”
Experts add that if Bass Pro does acquire Cabela’s, the company will have a firm grip on the outdoor retail industry and perhaps give greater competition to online giants such as Amazon.