UPDATE 3-Bass Pro Shops hooks Cabela's in $5.5 bln deal

Mon Oct 3, 2016 11:53am EDT
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* Offer of $65.50/share at 19.2 pct premium

* Bass Pro's store count to double in North America

* Bass Pro founder Morris to head combined company (Adds background, updates shares)

By Abhijith Ganapavaram

Oct 3 (Reuters) - Cabela's Inc said it agreed to be bought by Bass Pro Shops in a deal valued at $5.5 billion that will combine the top two hunting and fishing retailers in the United States.

Springfield, Missouri-based Bass Pro Shops, a long-time suitor of Cabela's, will nearly double its store count in North America through the addition of Cabela's 85 stores.

Cabela's, whose stores are known for their museum quality experience and taxidermy services, are located mostly in the U.S. Northwest, while Bass Pro's 99 stores are concentrated in the Northeast.

The deal comes nearly a year after activist hedge fund Elliott Management said it had taken an 11.1 percent stake in the company and called for a sale. Two months later, Cabela's said it would explore strategic alternatives.

Elliott stands to make $419.2 million from the deal, or nearly double of what the hedge fund paid for its stake, according to regulatory filings.   Continued...