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Cabela’s started exploring a sale of the company, under pressure from activist investor Elliott Management which acquired an 11% stake in Cabela’s last year. The founding Cabela family reportedly still held a 24% stake in the company. A driving force behind the deal is the highly complementary business philosophies, product offerings, expertise and geographic footprints of the two businesses. The combination brings together three of the nation’s premier sporting brands: Cabela’s, a leader in hunting; Bass Pro Shops, a leader in fishing; and White River Marine Group, a worldwide leader in boating, which is part of Bass Pro Shops. At closing Bass Pro Shops will also commence a multi-year partnership agreement with Capital One NA, a banking subsidiary of Capital One Financial Corp. (NYSE: COF), which will originate and service Cabela’s co-branded credit card, Cabela’s Club. Cabela’s is reportedly the only remaining U.S. retailer that still operates its own credit card bank. Seattle-based Nordstrom was the only other retailer that operated a bank until last year, when it sold its $2.2 billion credit-card portfolio to TD Bank. Founded in 1961 by Dick, Mary and Jim Cabela, Cabela’s is a highly respected marketer of hunting, fishing, camping, shooting sports and related outdoor merchandise. Today, Cabela’s has over 19,000 employees at 85 specialty retail stores, primarily in the western U.S. and Canada. Cabela’s stores, catalog business and e-commerce operations have built a passionate and loyal base of millions of enthusiasts. The foundation of Cabela’s business was its world-famous catalog. The company produces nearly 100 different catalogs per year, including specialty books focusing on such outdoor pursuits as archery, fly-fishing and boating, as well as massive Spring and Fall Master catalogs. Internationally known as a source of affordable, high-quality outdoor equipment, Cabela’s catalogs are shipped to all 50 states and 125 countries. Bass Pro Shops, founded in 1972 by avid young angler Johnny Morris, is a leading national retailer of outdoor gear and apparel, with 99 stores and Tracker Marine Centers located primarily in the eastern part of the U.S. and Canada. Morris started the business with eight square feet of space in the back of his father’s liquor store in Springfield, Mo., the company’s sole location for the first 13 years of business. His passion for the outdoors and his feel for the products and shopping experiences desired by outdoor enthusiasts helped transform the industry. Bass Pro Shops, whith nearly 20,000 employees, also operates Big Cedar Lodge, America’s premier wilderness resort, welcoming more than one million guests annually to Missouri’s Ozark Mountains. In 1978, Morris revolutionized the marine industry when he introduced the world’s first professionally rigged and nationally marketed boat, motor and trailer packages. Tracker quickly became and has remained the number one selling fishing boat brand in America for the last 37 years running. White River Marine Group offers an unsurpassed collection of industry-leading brands including Tracker Boats, Sun Tracker, Nitro, Tahoe, Regency, Mako, Ranger, Triton and Stratos. “Today’s announcement marks an exceptional opportunity to bring together three special companies with an abiding love for the outdoors and a passion for serving sportsmen and sportswomen,” said Johnny Morris, founder and CEO of Bass Pro Shops. “The story of each of these companies could only have happened in America, made possible by our uniquely American free enterprise system.” “Cabela’s is pleased to have found the ideal partner in Bass Pro Shops,” said Tommy Millner, Cabela’s chief executive. “In addition to providing significant immediate value to our shareholders, this partnership provides a unique platform from which our brand will be extremely well positioned to continue to serve outdoor enthusiasts worldwide for generations to come.” Bass Pro Shops has secured $2.4 billion in preferred equity financing from the Merchant Banking Division of Goldman Sachs, which has committed $1.8 billion, and Pamplona Capital Management, which has committed $600 million. The deal provides Cabela’s shareholders with a premium of 19.2% to Cabela’s closing share price on Sep. 30, 2016, the day prior to announcement of the transaction, 39.7% to the closing share price on Dec. 1, 2015, the day before Cabela’s announced its exploration of strategic alternatives and 57.1% to the 90-day volume weighted trading average prior to Dec. 1, 2015. Immediately prior to closing, Capital One will acquire certain assets and assume certain liabilities of Cabela’s World’s Foremost Bank. The cash proceeds from this transaction will remain with Cabela’s until it is acquired by Bass Pro Shops. The transaction agreements were unanimously approved by Cabela’s board of directors following a comprehensive review of strategic and financial alternatives. The deal, which is expected to close in the first half of 2017, will be completed through a cash merger and is subject to approval by Cabela’s shareholders, as well as regulatory approvals and other customary closing conditions. J.P. Morgan served as exclusive financial advisor to Bass Pro Shops and Latham & Watkins served as Bass Pro Shops’ legal counsel, with expert assistance from O’Melveny & Myers. Goldman, Sachs & Co. served as financial advisor to The Merchant Banking Division of Goldman Sachs and Davis Polk & Wardwell LLP served as legal advisor. Goldman, Sachs & Co. also served as advisor to Bass Pro Shops on the bank transaction, and Morrison & Foerster served as legal counsel. BofA Merrill Lynch, Wells Fargo Securities LLC, Citigroup Global Markets Inc., RBC Capital Markets, UBS Securities LLC, and Goldman Sachs are providing debt financing to support the transaction. Guggenheim Securities served as exclusive financial advisor to Cabela’s and Sidley Austin LLP and Koley Jessen PC LLO served as Cabela’s legal counsel. The Kessler Group and Credit Suisse acted as financial advisers to Capital One and Wachtell, Lipton, Rosen & Katz and Chapman and Cutler acted as legal advisers. Photo: Johnny Morris, Founder & CEO, Bass Pro Shops.]]>