Bass Pro Shops, Cabela tweak deal to appease regulators

The outdoor sign seen at the Cabela's store in Denver

Cabela's on Monday announced a revised deal to sell both its retail and bank businesses.

Bass Pro will acquire Cabela's for $61.50 per share, lower than the originally agreed upon $65.50-per-share price, Cabela's said. Now the companies have announced that the deal is going forward, but at a price cut of $4 per share of Cabela's, and the addition of a middleman in the sale of its credit card operations to Capital One. Synovus will sell Cabela's credit card assets and liabilities to Capital One and keep the deposits.

"It seems to us that SNV is merely serving as a regulatory "pass-through" in this transaction for Cabela's and Capital One, and, in turn, will gain increased liquidity", wrote Hovde Group Inc. analyst Kevin Fitzsimmons in a note Monday adding that Synovus will receive about $75 million in payment from Capital One and Cabela's for its roll in the transaction.

Cabela's and Bass Pro Shops have a lot in common.

Privately owned Bass Pro Shops owns over 90 giant retail locations in North America that focus on fishing, boating, and camping, while Cabela's runs roughly 85 stores in the U.S. and Canada in a similar space, but with a primary focus on hunting.

Cabela's said its board approved the deal, which it expects to close in the third quarter of 2017. "We look forward to completing these transactions for the benefit of our shareholders, Outfitters and outdoor enthusiasts".

In reporting fourth-quarter earnings, Millner noted that similar to industry trends, Cabela's experienced strength in firearms and shooting-related categories primarily early in the quarter.

Bass Pro and Cabela's didn't specifically address the reason for the lower bid.

The bank said in December that it did not believe it would receive regulatory approval from the Office of the Comptroller of the Currency in time to meet the October 3 deadline to close the deal.

Bass Pro Shops Chief Executive Johnny Morris called the agreement "an important step forward". That transaction is expected to close immediately prior to the closing of the Bass Pro Shops merger, according to the statement.

The $61.50 per share price is still a good deal for shareholders, said Gordon, the University of MI professor, and even for the people of Sidney, the Nebraska town Cabela's now calls home.

The Federal Trade Commission, which regulates and enforces antitrust laws, had sought more information from the companies about the deal.

The companies have an overlap across Texas, Missouri and Kansas. A share of Cabela's stock closed at $53.69.

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