Elliott Management Corp. disclosed a significant stake in Cabela’s Inc. and said it plans to seek talks with the retailer’s board regarding a number of strategic options, including a possible sale of the company. On Wednesday, shares of Cabela's rose $5.84, or 17.5 percent, to $39.26 on the news.
In a filing with the Securities and Exchange Commission, the activist investor group, run by hedge-fund billionaire Paul Singer, said as of Oct. 27 it had a stake of 11.1 percent in Cabela's.
Elliott Management said Cabela’s stock is significantly undervalued and thinks there is a “robust environment for private-equity investment in retail companies” and potential strategic interest in the retailer that could provide “multiple pathways” to unlock shareholder value. The investment firm plans to hold discussions with the chain’s board and
management about options that could include a sale, changing the
capital structure, or reshuffling management and operations.
Cabela's didn't respond to press inquiries.
The move follows a slump at Cabela’s after the chain reported disappointing earnings last week due to
“significant weakness” in its fall apparel and footwear offerings as well as as well as lower operating margins. Cabela’s shares had been down 37 percent this year before Wednesday’s rally.
According to Bloomberg, the fund agitated for changes at EMC Corp., which earlier in October agreed to be bought by Dell Inc. Elliott’s bid for software maker Novell Inc. in 2010 led to its sale to Attachmate Corp. Other Elliott Management targets have included Riverbed Technology Inc., Juniper Networks Inc., NetApp Inc. and Informatica Corp.
