Gillian Tan, Columnist

Cabela's Deal With Bass Pro Is Salvageable

The stock is arguably trading at a steeper discount than it deserves.

February 15, 2017 at 4:01 PM UTC

Gillian Tan is a senior reporter covering finance and alternative asset classes including real estate, infrastructure, private equity, private credit, venture capital and sports business. She previously wrote an opinion column for Bloomberg and was a reporter at the Wall Street Journal. She is a qualified chartered accountant.

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It's been a little over four months since outdoor-gear retailer Cabela's Inc. agreed to a $5.5 billion takeover by closely-held rival Bass Pro Shops at a mammoth premium, valuing it at $65.50 apiece. Since then, it has slipped more than 26 percent from its post-offer peak to as low as $46.28 on Wednesday because the deal, once a sure thing, is now anything but.

Analysts and investors believe Cabela's could sink even lower -- to say, $35, if a deal isn't consummated.1487164313186 But if a transaction is completed, even at a renegotiated price, the stock is arguably trading at steeper discount than it deserves. Which will it be?