Cabela's Fields Bid Interest, Weigh Options for Companyby and
Sporting and hunting goods retailer under activist pressure
Rival Bass Pro working with JPMorgan to explore acquisition
Cabela’s Inc., which came under pressure from activist investor Elliott Associates last month, is fielding potential takeover interest and weighing whether to begin a sales process, people with knowledge of the matter said.
The retailer of hunting, fishing and camping supplies is working with its regular advisers at Guggenheim Partners, which has begun reaching out to a small group of potential private equity buyers and strategic acquirers, said the people, who asked not to be identified as the matter is private. Competitor Bass Pro Shops is working with JPMorgan Chase & Co. to help it explore a bid for Cabela’s, other people said.
Cabela’s board hasn’t authorized a formal strategic review or given advisers an official mandate to seek buyers, one of the people said.
Private equity firms including KKR & Co., Hellman & Friedman and TPG Capital may also be interested in bidding for the company, the people said. Several buyout firms have expressed interest in a deal that may value Cabela’s at a per-share price in the mid- to high-$50s, two of the people said.
The shares rose 10 percent to $46.10 on Friday after Bloomberg News reported on the deliberations. They closed at $33.42 on Oct. 27, the day before Elliott disclosed an 11 percent stake in the company and said it may push for a shake-up or leveraged buyout.
Elliott has already held talks with the company and other key investors, one of the people said. Representatives for Bass Pro, Cabela’s, Hellman, Guggenheim, JPMorgan and TPG declined to comment. A spokeswoman for KKR didn’t respond to requests for comment.
The move follows a slump at Cabela’s, which built a following among hunters and outdoor enthusiasts but has seen comparable-store sales decline after a surge in gun sales in recent years. Once a family business, Sidney, Nebraska-based Cabela was co-founded by brothers Richard and Jim Cabela in 1961. Richard died last year, and Jim, now in his mid-70s, still serves as chairman.
Cabela’s wouldn’t be the first sporting-goods chain to see interest from private equity investors. KKR & Co. purchased Academy Sports & Outdoors in 2011, while Leonard Green & Partners bought Sports Authority in 2006 for $1.3 billion.
Run by hedge-fund billionaire Paul Singer, Elliott has been involved in a number of efforts to shake up companies in recent years. The firm, which manages about $27 billion, has focused most of its U.S. activist campaigns on enterprise software and hardware technology companies.