Cabela's Inc. continues to explore selling World's Most Foremost Bank (WFB) and its retailing business in separate transactions even though such a sale could hurt the performance of both businesses, the company disclosed in a government filing.
On December 2, 2015, Cabela’s announced that its Board of Directors had initiated a process to explore and evaluate a wide range of strategic alternatives to further enhance Cabela’s shareholder value.
That process has continued and is ongoing, according to a document Cabela's filed June 16 with the Securities and Exchange Commission ahead of a routine offering of securities tied to credit card receivables owned by the bank, which issues Cabela's Club Visa credit cards.
"The results of this strategic alternatives review process could include, but are not limited to, a sale of Cabela’s or one of its businesses, including a sale of the bank or its assets, or a transaction combining a sale of the bank or all or a portion of its assets to one or more purchasers and a sale of the parent company (including all of its merchandising business) to one or more other purchasers," Cabela's reported. "Any such transaction could adversely impact Cabela’s business, the bank and the Cabela’s Club program."
If Cabela's sells WFB, it's unlikely the buy would continue to use WFB to securitize receivables, which could adversely affect the liquidity for the notes, Cabela's warned. In addition, any purchaser of WFB, or Cabela’s itself, might seek to repurchase some or all of the notes.
A $12.3 million, or 25.4 percent, increase in profits from WFB more than offset a decline in profits from Cabela's merchandise sales in the fiscal first quarter ended April 1.
