An investment banker says the movement of 11.2 million company shares into charitable trusts could be a “red flag” pointing to a coming sale of the Sidney, Nebraska retailer.

Cabela’s Chairman Jim Cabela moved 11.2 million company shares last year into charitable trusts, according to documents filed Wednesday with the U.S. Securities and Exchange Commission. At the stock’s current price, that’s nearly a half-billion dollars in stock.

It’s unclear when in 2015 the shares were transferred to the trusts. The documents indicate only that the move happened sometime during 2015 — the same year that an activist investor took a big stake in Cabela’s and said it would press for changes.

An investment banker says the move could be a “red flag” pointing to a coming sale of the Sidney, Nebraska retailer. Other professionals who work with trusts and estates also said the transfer could point to a coming sale of the company.

“It could mean that he’s expecting that that’s going to happen soon,” said Jim Zipursky, managing director of Omaha’s Corporate Finance Associates MidWest, which handles mergers and acquisitions. “It’s just another signal that something’s coming down.”

The holdings that were put into trusts appear to be nearly all of Jim Cabela’s personal holdings in the company, according to public documents.

Putting the shares into a charitable trust shields them from a massive tax bill. The Securities and Exchange Commission requires the move to be reported within 45 days from the end of the year in which the shares were transferred.

Now that the shares are in trusts, if the shares are sold or liquidated — like what would happen if Cabela’s were sold to a private entity — the gain in value from their original cost is not subject to capital gains taxes or estate taxes, said Ted Bridges, president of Bridges Investment Management in Omaha.

Charitable remainder trusts hold assets, such as real estate and stock, until the trustee dies. In this case, the trustee is Jim Cabela, according to the SEC documents. He will retain the voting rights associated with the shares. That means he’ll still hold sway as a holder — through his trusts — of about 16 percent of the company.

Jim Cabela didn’t respond to a message left at his home.

Once he dies, the assets must be distributed to registered 501(c)(3) nonprofit, said Donald Mundy, president of The Solutions Group Inc., an Omaha financial advisory firm. Before then, the manager of the trust can extract an annual salary based on the person’s age and the value of the trust, Mundy said.

That could mean one nonprofit is in for a windfall donation, or the money could be distributed to several different charities. It also could go to the Cabela Family Foundation, which already exists.

Often, the beneficiaries of such trusts are not made public before funds are distributed, said Lee Dunham, an associate professor of finance at Creighton University’s Heider College of Business. The funds are sometimes transferred to a foundation, which then doles out cash to various charities as it sees fit.

Whatever the plan upon 76-year-old’s Jim Cabela’s death, the formation of the trusts raised some eyebrows. Many older, wealthy people establish charitable trusts to shield assets from taxes and allow them to contribute more to charity. But Jim Cabela’s move comes the same year the company is in the sights of an activist investor.

“The transfer to a trust would be consistent with a person expecting to receive tax benefits in the near future,” said Jonathan Moreland, founder of, which analyzes trading of people close to companies. “It certainly will not dispel any rumors that corporate action is possible.”

That corporate action could be the sale of the company.

Cabela’s has been under pressure since activist hedge fund Elliott Management declared an 11 percent stake in the company in October. New York-based Elliott said it would push for changes, including a breakup or sale of the retailer.

Elliott said in an Oct. 28 government filing that “in light of the robust environment for private equity investment in retail companies,” potential strategic interest in Cabela’s and the company’s assets — including real estate and a valuable credit card business — “there exist multiple pathways” for Cabela’s to “unlock significant unrealized value.”

Elliott Management and Cabela’s both declined to comment for this story.

Cabela’s said in December that it would undergo a strategic review — often Wall Street speak for the sale of the company or parts of the company.

Reuters news service has reported that Cabela’s is shopping itself around to private equity firms. Bloomberg News reported last year that competitor Bass Pro Shops was interested in making a bid for the company. Bass Pro wouldn’t comment.

Other Cabela family members still own significant blocks of Cabela’s shares, according to federal documents that large shareholders must file. The Cabela Family LLC owned 8 percent of the company as of April of last year. That means the Cabela family — including Jim Cabela’s new charitable trust — together controls about 24 percent of the company.

Cabela’s shares have been trading at about $40 per share. (They closed Thursday at $39.10 each on the New York Stock Exchange, down about 16 percent so far this year.) But if a buyer were to make a bid for the company, the buyer most likely would pay a premium over the current share price to entice shareholders into accepting the deal.

If a buyer paid $60 or $70 per share for the company, Jim Cabela’s 11 million shares would be worth nearly $1 billion.

Once assets are put into the trust, “he can’t take them back,” said Zipursky, the investment banker who doesn’t have any connection to Cabela’s.

“There is a reason for this,” he said.

World-Herald staff writer Steve Jordon contributed to this report.

Contact the writer: 402-444-1414,


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