Robbins Arroyo LLP: Acquisition of Cabela’s Incorporated (CAB) by Bass Pro Shops (Private) May Not Be in Shareholders’ Best Interests
Shareholder rights attorneys at Robbins Arroyo LLP are investigating the proposed acquisition of Cabela’s Incorporated (NYSE: CAB) by Bass Pro Shops (Private). On October 3, 2016, the two companies announced the signing of a definitive merger agreement pursuant to which Bass Pro will acquire Cabela’s. Under the terms of the agreement, Cabela’s shareholders will receive $65.50 for each share of Cabela’s common stock.
Is the Proposed Acquisition Best for Cabela’s and Its Shareholders?
Robbins Arroyo LLP’s investigation focuses on whether the board of directors at Cabela’s is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $65.50 merger consideration represents a premium of only 19.20% based on Cabela’s closing price on September 30, 2016. This premium is significantly below the average one day premium of nearly 70.97% for comparable transactions within the past five years. In the last three years, Cabela’s traded as high as $72.53 on March 21, 2014.
On July 28, 2016, Cabela’s reported strong earnings results for its second quarter 2016. Cabela’s reported revenue of $929.9 million for the three months ended July 2, 2016, an 11.2% increase from the same period of the prior year. In commenting on these results, Cabela’s Chief Executive Officer Tommy Millner remarked, “Success in our expense management efforts allowed us to take a more aggressive price and promotion approach in the second quarter. This approach led to improvements in transaction trends, positive comparable store sales, growth in Internet and catalog sales, and market share improvements.”
In light of these facts, Robbins Arroyo LLP is examining Cabela’s board of directors’ decision to sell the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
Cabela’s shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
Cabela’s shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.