BPS Cabela's merger update thread

[OperationEagle]

These are two of my go to stores for my fishing needs...so I am always interested in hearing about the latest news, interpretations of what is happening, conjecture of what might happen, and opinions about the deal.

 

This effects all of us fishermen whether you are a customer of either store or not.  

 

I will start...

 

i do do believe that they said this deal would close in early 2017. Thinking about it, that might be overly optimistic.  A question I have is how does the death of Sports Authority have on how the Feds see this deal? Help or hurt?  I can make arguments for both.

 

Discuss...

[CTBassin860]

Already starting to see the Cabelas stuff in BPS as they are now starting to bring in Daiwa.

Its a good thing

 

[Basseditor]

The "buyout " is pending federal approval. The Feds will look at stores too close to each other. BPS/Cabelas may need to sell a few buildings to make the deal go through.

[Darren.]

There's already a few discussions on the merger, FWIW.

Above is just one.

 

And doubt Sports Authority closure will have any impact
seeing they, like Dick's cover(ed) broad spectrum of 
sports, not just fishing and hunting...that's my opinion,
the lawyers will decide this one  

[mixel]

It's smart business to buy out your competitors but obviously not the best for consumers. 

 

Although this does seem like it would create a merger and a great candidate for a block by the Feds, it's not unheard of that the Feds have somehow let other mergers happen that have created monopolies. Case in point, when Adobe bought out their only competition in Macromedia before Macromedia got too big. Can't believe the Feds let that one happen. 

 

Back on topic, I agree with Darren on Sports Authority and Dicks probably have little or no bearing on this as those seemed like general sporting goods stores for soccer moms, much more so than shopping destinations hunters and fisherman.

[The Fisher]

The FTC plans to look closely at the merger but expect it to close https://www.google.com/amp/www.wsj.com/amp/articles/regulators-raise-concerns-over-bass-pro-shops-cabelas-merger-1483104924?client=safari

[junyer357]

It worries me simply because they are already 2 of the highest priced places to get gear, or at least what i have seen. Its very rare i buy anything from either due to this. Their sale prices are usually ok but in line with other places (acadamy) regular prices. The lack of comptetition between them will be very bad for us as consumer. Fishing prices are already outrageous and only going up as it is. 

[mixel]

^well I agree with The Fisher in thinking that it's highly probable this merger is going to happen. I wouldn't stress over it as you can only control what you can control. You'll just have to do more with less, or switch to cheaper gear.

 

For prices, it's always the same for any product. Something is worth whatever consumers are willing to pay for it. 

 

[MDBowHunter]

I personally think this sucks as I haven't went in to a BPS in a few years because their prices are toooo high and the customer service sucks. I loved Cabelas but now that its owned by BPS my shopping there is done, I guess this is a good thing for Tackle Wharehouse because thats where my business goes. Besides who can beat $5 two day air, hell i spend more then that just driving to BPS one time.

 

19 hours ago, MassBassin508 said:

Already starting to see the Cabelas stuff in BPS as they are now starting to bring in Daiwa.

Its a good thing

 

BPS had daiwa up until a few years back, when they picked up lews they stopped handling daiwa

[Avalonjohn44]

6 hours ago, MDBowHunter said:

I personally think this sucks as I haven't went in to a BPS in a few years because their prices are toooo high and the customer service sucks.

 

I'm sorry to hear this. My experience has been the almost totally the opposite, everyone I've been to, from Atlantic City down to Ft Lauderdale I've received nothing but good to great customer service except once, in Arundel Mills, but that was on Black Friday and the store was jam packed full of fools like me.

 

I am hopeful for the merger and think it will be a good thing overall for the consumer... I do worry about store closures and local jobs where a BPS and Cabelas are close together though.

[IndianaFinesse]

3 hours ago, Avalonjohn44 said:

I am hopeful for the merger and think it will be a good thing overall for the consumer... I do worry about store closures and local jobs where a BPS and Cabelas are close together though.

Less competition is never a good thing for the consumer.

[mixel]

20 minutes ago, IndianaFinesse said:

Less competition is never a good thing for the consumer.

 

This.

[Avalonjohn44]

Maybe you're right, but even so, I'll choose to remain optimistic until there is a definitive reason not to be. 

I don't believe this is going to change a great deal, BPS's main competition will shift a bit from Cabela's to the rest of the crowded field like TW, Gander Mt, Academy, DSG and even Amazon and Walmart, so I think their prices will remain somewhat competitive. The situation could even open up opportunities (especially if some duplicate stores are closed) for some local shops to step it up.

[dwardmba]

I saw a piece, might have been in the WSJ, that implied Cabellas would continue to focus on the hunter while BPS would continue with the fishing focus.  I think both stores did well individually so there is plenty of opportunity for consolidation in corporate overhead and efficiencies in sourcing products, distribution, etc. Suppliers will likely feel the most pressure but as pointed out above have too many alternate channels to reach the consumers.

 

Up until late summer Chattanooga didn't have a BPS, my first stop for lures was Wal-Mart then Sportsman Warehouse then Academy.  Wall-Mart almost always had what I was looking for. Rods and such was Sportsman Warehouse or I waited until I could go to the BPS near Birmingham when I was down there.

 

Time will tell.

 

Dave

[12poundbass]

Rarely shop at either, almost always shop at a local store in my area. Maybe the price of their boats will come down. ?

[OperationEagle]

Dec 30 Dow Jones Newswire...so old news but interesting read nonetheless...

 

Federal regulators have raised questions over Bass Pro Shops' $4.5 billion deal to buy fellow outdoor-sports gear retailer Cabela's Inc., creating hurdles for the completion of the acquisition and sending shares of Cabela's lower. 

In a regulatory filing Friday, Cabela's said two regulatory approvals for the deal had hit speed bumps. The Federal Trade Commission requested additional information from Cabela's and Bass Pro Shops earlier this week. The FTC says the vast majority of deals are approved without additional information requests, but Cabela's said the request doesn't mean the agency has concluded the deal presents any anticompetitive concerns. 

Bass Pro Shops declined to comment. 

Meanwhile, Capital One Financial Corp., which is buying Cabela's credit card business as part of the deal, also told Cabela's it expects a banking regulator, the Office of the Comptroller of the Currency, to eventually approve the deal -- but not before October, when the parties to the merger can walk away and well after the companies involved had expected the deal to close. The OCC said it doesn't comment on specific banks or deals. 

KBW research analysts said the news from Capital One indicates a lengthening of the banking deal's process. Capital One said it continues to believe in the value of its relationship with Cabela's and is working to meet its commitments. 

Bass Pro, Cabela's and Capital One had said previously they expected both deals to close in the first half of 2017 and the credit-card transaction was contingent on the primary deal closing. Cabela's said it still expects FTC approval in the first half of the year, but it was exploring alternative structures for the deal to allow for a closing before the October deadline. 

A Bass Pro-Cabela's merger would create a national chain with more than 180 locations, roughly 40,000 workers and control of more than 20% of the $50 billion U.S. hunting, camping and fishing market, Stifel analyst Jim Duffy has said. 

In its annual filing, Cabela's said its markets are fragmented and competitive but also notes some of the largest competitors, such as Wal-Mart Stores Inc. and Amazon.com Inc., don't compete in many of the product lines it offers. 

Shares of Cabela's fell 5.6% to $58.25 in morning trading, below the deal price of $65.50 a share. 
 

[OperationEagle]

Interesting insight...seems like a side deal with Capital One is the hold up....at least according to this article.

 

Bass Pro Shops' Purchase of Cabela's Hits a Snag By Investopedia | December 31, 2016 — 7:37 AM EST
     
Bass Pro Shops' plan to buy Cabela's (NYSE: CAB) for approximately $5.5 billion has hit a snag with federal regulators.

Under the terms of the agreement, the two rivals in the hunting, fishing, and outdoor gear space would merge into an entity that would be the dominant player in its market segment, but that's not what's causing problems. Instead, it's a snag involving the side deal that would have Capital One (NYSE: COF) acquire Cabela's credit card business that may hold the main acquisition up or even cause the deal to fall apart.

 

What is happening?
Capital One has signed a 10-year agreement to issue credit cards to Cabela's customers. To do that, the company is acquiring a separate business, World's Foremost Bank. But it has told Bass Pro it does not expect that purchase to receive federal regulatory approval before Oct. 3, 2017, Reuters reported.

 

The deal between Cabela's and Bass Pro is contingent upon the credit card issue being resolved. If Capital One can't close its deal before Oct. 3, 2017 then Cabela's and Bass Pro would each have the right to terminate their deal.

 

What is going to happen?
While technically this snag could cause the deal to fall apart, Cabela's entered the agreement willingly and there is no reason to think either retailer wants to walk away. The company has in fact said it is looking for "potential alternative structures" to allow both the transactions to close on or before Oct. 3, according to Reuters.

 

Cabela's CEO Tommy Millner explained why his company agreed to sell in the press release announcing the deal.

Having undertaken a thorough strategic review, during which we assessed a wide variety of options to maximize value, the Board unanimously concluded that this combination with Bass Pro Shops is the best path forward for Cabela's, its shareholders, outfitters and customers," he said." 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.

 

Everything he said at that time remains true now, and no more logical or better partner for his company has emerged.

It seems likely that no matter what happens with Capital One, the two retailers will find a way to make this deal -- or a similar one -- happen. The credit card complication offers both sides a potential out, but neither actually seems to be looking to break the agreement, so it should take place as soon as regulators sign off on the merger.

 

[Buckeye Ron]

On 1/1/2017 at 10:15 PM, Avalonjohn44 said:

Maybe you're right, but even so, I'll choose to remain optimistic until there is a definitive reason not to be. 

I don't believe this is going to change a great deal, BPS's main competition will shift a bit from Cabela's to the rest of the crowded field like TW, Gander Mt, Academy, DSG and even Amazon and Walmart, so I think their prices will remain somewhat competitive. The situation could even open up opportunities (especially if some duplicate stores are closed) for some local shops to step it up.

 

Agree with this^^^.     Also,if I was the guy buying fishing gear for Walmart I'd be paying attention right about now because I see an opportunity to gain some market share. They are the only player in the game that's big enough to force BPS to remain cost competitive.

[mixel]

15 minutes ago, Buckeye Ron said:

They are the only player in the game that's big enough to force BPS to remain cost competitive.

 

Currently, perhaps. But Amazon is catching up and has now become a dominant player in the retail market. They are an extremely fast moving and powerful company. So much that Walmart decided to buy Jet.com for $3b last year to compete. The future is online retail, rather than brick and mortar. I do think Bass Pro Shops will be around for the foreseeable future though as they have such a strong brand especially now with the Cabelas merger. I just hope this means prices will be good for us little folk. 

[OperationEagle]

Watching CNBC.  They just did a spotlight on the drop in gun sales which threatens the competitive nature of the gun retailers. 

 

They reported that this in addition to issues with the divest of cabelas credit card unit to capital one place the probability of the completion of the deal at 40%. 

 

This all despite the business and merger friendly posture of the new administration.  

 

We just might be able to keep cabelas around for just a little longer after all.  Good news for us sportsman to have an additional quality option. 

 

An an interesting article.

 

http://www.retaildive.com/news/cabelas-bass-pro-merger-further-in-doubt-as-credit-card-business-sale-falt/436365/

[Paul Roberts]

Right now Cabela's appears to be operating at half mast. Catalogs are smaller, a lot of typo's and even outright errors, shipping is slow, and website is not being kept up to date. I just returned some cranks that were a different marketly color than shown on-line although the name and stock numbers were the same. Somewhat minor irritation, but considering the competition, its apparent that Cabela's is running behind right now.

[OperationEagle]

news reports around the twin cities say that gander mountain is readying to go into bankruptcy.  

 

You want to talk about lackluster service, stores, and inventory...can't get much worse than gander. 

[ChrisD46]

For me , Cabela's is 5 miles away while BPS is 35 miles away ... I would favor the merger IF it meant more BPS goods in the Cabela's store close to me .

[the reel ess]

I kinda hope it doesn't go through. I despise WalMart and these two would probably merge to become the WalMart of the outdoors biz. They will force companies to make cheaper than average products if they want to sell there and call them store exclusives when they're really cheap knockoffs. As mentioned several times in this thread, competition benefits the consumer and the lack of it benefits the corporation that comes out of this with more control over the market.

[Airman4754]

On 1/1/2017 at 9:15 PM, Avalonjohn44 said:

Maybe you're right, but even so, I'll choose to remain optimistic until there is a definitive reason not to be. 

I don't believe this is going to change a great deal, BPS's main competition will shift a bit from Cabela's to the rest of the crowded field like TW, Gander Mt, Academy, DSG and even Amazon and Walmart, so I think their prices will remain somewhat competitive. The situation could even open up opportunities (especially if some duplicate stores are closed) for some local shops to step it up.

 

If BPS stays with their insane prices and shipping costs Tackle Warehouse will lap them by 2020, and they should.