Bass Pro Shops is working with an investment bank on a potential offer for Cabela’s Inc., according to Reuters. Cabela's has also recently begun to explore its options and has also reached out to private equity firms to solicit interest, according to sources.
The Reuters article is here.
In October, activist investor Elliott Management disclosed an 11 percent stake in Cabela's and called for it to explore strategic alternatives. The buyout 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.
In reporting disappointing third-quarter results, Cabela's launched a major multi-year corporate restructuring project aimed at lowering its expense base as well as moves to optimize its balance sheet. As part of this process, the company plans to reduce working capital and sell unproductive assets. The proceeds from this balance sheet improvement will be used to help fund the company’s previously announced $500 million share repurchase program.
Cabela's also runs a credit card business, through its wholly owned subsidiary, World's Foremost Bank.
