Nationwide, Bass Pro Shops and Cabela’s are the two largest outdoor companies in the United States. Their stores are famous for not only their large variety of merchandise, but also for their displays, such as huge aquariums with freshwater sport fish.
Pro Bass Stores began procedures to purchase Cabela’s earlier this year, but the sagging gun sales stalled the buyout. This week, the Federal Reserve gave a green light for the purchase. The question now is who much will the purchase cost Bass Pro Shops?
The second quarter earnings for Cabela have dropped due to a decrease in gun sales. Some feel the owners of Cabela’s are desperate to sell as soon as possible. This has also caused a drop in the price of Cabela’s stock, which those with Pro Bass Shops hopes reduces the purchase price for the company.
Bass Pro’s purchase of Cabela’s hasn’t exactly been smooth sailing. Poor quarterly earnings, in part due to a depressed firearm market as well as the liquidation of Gander Mountain’s gun inventory, caused the two outdoor retailers to have difficulties. In addition, the powers that be wanted to sell Cabelas finance arm. Unfortunately, that kind of thing requires government approval.
According to Guns.com, though, they got it.
Federal regulators approved part of the pending Cabela’s multi-billion dollar merger with Bass Pro Shops Wednesday, sending its share prices up more than 14 percent in after hours trading.
With the Federal Reserve’s green light on Cabela’s sale of its consumer credit financing arm — World’s Foremost Bank — to Synovus Financial Corp, out of the way, the $5 billion buyout deal can proceed…
If the purchase of Cabela’s goes through, it will make Bass Pro Shops the largest outdoor retailer in the nation. The estimated date for the deal to go through is set for October 3. At least at the beginning, Pro Bass Shops say they will keep the Cabela’s name on those stores, but with the weak reported second quarter sales, the buyout could mean layoffs, especially at the headquarters of Cabela’s.