Four investors in Cabela's Inc. on Thursday dropped class action claims accusing the outdoor sporting retailer of failing to disclose important details related to the company's $5 billion sale to Bass Pro Shop, saying that Cabela's has addressed its concerns with additional disclosures.
The announcement came more than two weeks after Cabela's stockholders voted on July 11 to approve the deal, which gave investors $61.50 cash for each share they held in the company. According to Cabela's filings with the U.S. Securities and Exchange Commission, 78 percent of outstanding shares were cast in favor of the merger.
Shareholders Adam Klein, Bernard Garcarz, Christopher Brown and John Solak filed separate class action complaints last month, saying a June 5 proxy statement detailing the deal was "incomplete and materially misleading." Their cases had been consolidated into a single suit before U.S. District Judge Richard G. Andrews of the District of Delaware.
"Defendants, separately and together, in connection with the proposed transaction are knowingly or recklessly violating their fiduciary duties, including their duties of loyalty and due care owed to plaintiff and other public stockholders of Cabela's," Solak said in a court filing.
Cabela's later supplemented its disclosures in a June 22 SEC filing that provided additional insight into the financial projections it used when assessing the deal.
On Thursday, attorneys from Faruqi & Faruqi and Rigrodsky & Long told Andrews that their clients were satisfied with the additional information they received from Cabela's, and the judge approved their request to withdrawal their claims.
"Plaintiffs believe and contend that the supplemental disclosures were material and mooted the claims set forth in the actions," Faruqi & Faruqi partner Michael Van Gorder said in the filing.
"Plaintiffs assert that the prosecution of the actions caused Cabela's to file the supplemental disclosures with the SEC and that plaintiffs' counsel has the right to seek and recover attorneys' fees in connection with a claimed common benefit provided to Cabela's stockholders as a result of the filing of the supplemental disclosures."
Van Gorder did not respond Friday to a request for comment on the dismissal.
Cabela's initially announced its deal with Bass Pro last October. However, the deal was later thrown into jeopardy when the Capital One National Association said it would likely be unable to get regulators to sign off on its planned acquisition of Cabela's credit card portfolio and banking assets, leaving Bass Pro and Cabela's searching for alternative buyers.