The multi-billion dollar merger between Cabela’s and Bass Pro Shops will close the end of this month, according to a regulatory filing posted last week.
The $5 billion deal between the two outdoor retailers will be finalized Sept. 25, less than a month after the Federal Reserve cleared its last major hurdle: approving the sale of Cabela’s financing arm — World’s Foremost Bank — to the Georgia-based Synovus Financial Corp.
Bass Pro Shops bought Cabela’s in October for $5.5 billion, or $65.50 per share. Later the Missouri-based sporting goods chain restructured the deal for a lower share price of $61.50.
After Cabela’s weak second quarter sales, however, investor analysts cautioned the retailer could be desperate to close the deal, while Bass Pro Shops may see its former competitor’s tumbling stock as a cost-saving opportunity. All eyes turned to the fast-approaching Oct. 3 deadline from the feds to approve the credit sale to Synovus, who will subsequently sell the operation to Capital One, while keeping $1.2 billion in deposits.
Regulators approved the sale Wednesday, sending share prices for Cabela’s surging 14 percent — good news for the outdoor retailer after a long struggle with weak quarterly earnings. It’s days as a publicly-traded company, however, will be numbered. Bass Pro Shops doesn’t trade on the public exchange.
What will become of the 2,000 employees based at the company’s headquarters in Sydney, Nebraska — about six hours west of Omaha — remains a question mark. Cabela’s employs more than a quarter of the town’s 7,000 residents and economists warn job cuts will come, but likely not at the store level.
Erik Gordon, a professor at the University of Michigan’s Ross School of Business who focuses on mergers and acquisitions, told the North Platte Telegraph Monday it’s the company’s administrative positions most at risk for cuts since Bass Pro will consolidate both operations at their headquarters in Springfield, Missouri.
“The company will need a transition period to keep things running, but the long-term outlook isn’t good for people in those functions,” Gordon told the newspaper.
Cabela’s laid off 70 employees in March, though Bass Pro founder and Chief Executive Johnny Morris said he wants to retain “a significant presence” in Sydney. He has yet to elaborate on what that might mean.