After a prolonged spell of reports, Cabela's Inc CAB and Bass Pro Shops struck a definitive deal through which the latter would buy the former for $65.50 a share in cash. This translates into an aggregate transaction value of about $5.5 billion.
Bass Pro Shops has secured preferred equity financing from Goldman Sachs and Pamplona's Merchant Banking Division to help the transaction. While Goldman Sachs committed $1.8 billion, Pamplona pledged $600 million for a total preferred financing commitment of $2.4 billion.
The companies expect the transaction to be completed in the first half of 2017 subject to approval by Cabela's shareholders, and other customary closing conditions. The agreement indicated that cash proceeds of this transaction would continue to remain with Cabela's until the acquisition is completed.
Once the acquisition is completed, Bass Pro shops would start a multi-year deal with Capital One Financial Corp COF subsidiary for co-branding Cabela's credit card. On its part, Bass Pro would maintain a flawless amalgamation of credit card program and the merged firm's retail operations with deep customer relationships.
Johnny Morris, Founder and CEO of Bass Pro Shops, would continue as CEO and majority shareholder of the merged entity, which would be turned into a private firm. Morris commented, "By combining our efforts, we can have a profound positive impact on the conservation challenges of our day and help foster the next generation of outdoor enthusiasts."
Cabela's shares advanced $8.05, or 14.66 percent, to $62.95 in the pre-market trading on Monday.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.