When outdoor recreation retailer Cabela’s reports its first quarter results on April 28, a major topic that will loom over the proceedings will be whether the company is on the verge of being acquired by rival Bass Pro Shops.

Media outlets are claiming that Springfield, Mo.-based Bass Pro Shops, with backing from a private equity entity owned by Goldman Sachs, is looking to buy the Sidney, Neb.-based Cabela’s. Several industry observers acknowledge that the strategy of buying retailers is less common among investment banks, a move more common among private equity firms. Nevertheless, they can understand why a company like Cabela’s might appeal to Goldman Sachs enough to back Bass Pro Shops in a potential bid.

“In terms of where Cabela’s stores are in relation to Bass Pro Shops, the latter is better served by buying existing stores, rather than to build new ones,” says Barry Bain, director of GRS Centaur, the financial and real estate advisory arm of GRS Group. As Bass Pro Shops’ most direct competitor among outdoor recreation retailers, an acquisition might increase its market share and eliminate the risk of further dilution of its growth prospects, Bain adds.

Whether the company confirms this news or not, shareholders and industry observers expect Cabela’s to make an announcement about a strategic move at some point. The company revealed last December that it decided to work with financial advisor Guggenheim Securities to explore strategic alternatives, and it has been making eye-brow raising moves ever since.

Sprucing up the store for a sale?

A flurry of corporate restructuring activity, under an initiative called Vision 2020, followed. In February, the company promoted Scott K. Williams from executive vice president and chief commercial officer to president.

After that, James W. Cabela, chairman of the company, transferred 11.2 million shares of common stock into charitable remainder trusts, according to documents filed with the Securities and Exchange Commission. Cabela’s now owns the shares indirectly through the trusts, but retains sole voting and selling power over the shares. Charitable remainder trust contributions generate a potential income stream for beneficiaries with a potentially immediate tax deduction. Given the tax advantages of charitable remainder trusts, some believe that Cabela’s made the move in preparation of big news for the company.

More than fishing and Canada in common

Cabela’s and Bass Pro both specialize in outdoor recreation, but the similarities end there. Their strengths go far beyond fishing, hunting and hiking gear, and the differences between them might actually strengthen a case for consolidation.

Despite initial appearances, including reaching customers in the U.S. and Canada, the two retailers operate different business lines and are under different corporate structures. Bass Pro Shops is privately held, an LLC that operates 98 retail stores and Tracker Marine Centers across the U.S. and Canada, according to company information. Its Tracker Marine Group is a leading brand in the manufacturing and sale of fishing and cruising boats, and has been in the business for 37 years. The company also operates Big Cedar Lodge, a wilderness resort in the Ozark Mountains.

On Cabela’s side, the publicly-traded company has a smaller North American footprint—at the moment. The retailer expects to have at least 51 North American locations by the end of 2016, with a long-term goal of 225 stores, according to company information.  Aside from its retail stores, Cabela’s operates a direct sales channel and credit card operations.

Cabela’s did not return calls seeking comment, and Bass Pro Shops declined to comment on word of a buyout. Should the companies eventually come under one umbrella, however, the combined diverse business lines might make for a formidable operator in the outdoor recreation segment.

More than window dressing

Corporate restructurings and share transfers alone will not make Cabela’s a catch in the eyes of potential buyers. Strong results from several lines of business, however, should spark conversations across boardroom tables, if they haven’t already.

In its fourth quarter 2015 results, the company reported that across all of its business lines, revenue was up by 10.5 percent, or $1.4 billion. In addition to the strong results in its financial services business, retail store revenue was up 14.3 percent to $926.5 million; and direct business was up 0.5 percent to $351 million.

Consolidated same-store sales, however, decreased 4.9 percent in the fourth quarter. That followed a same-store sales dip of 4.2 percent in the previous quarter, with lagging sales in the fall apparel and footwear products. Also, new format stores continued to outperform legacy stores, in both sales and profit per square foot. Stores opened in 2015 underperformed the company’s expectations, leading Cabela’s to planned store openings to seven in 2016 and no more than that in 2017, according to a company statement.

Cabela’s might be reining in its store expansion plans, but a merger with a rival—with heavyweight investment banking backing—could change that.

“The combined retailer, with more efficiencies of scale and buying power, could achieve faster growth,” says Michael Wiener, president of New York-based Excess Space Retail Services, a division of Newmark Grubb Knight Frank that specializes in disposition of retailers'  surplus real estate. “Especially if they think some re-branding could escalate sales.”