Bass Pro Shops to pay less for Cabela's under new terms

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

Cabela's Inc. on Monday announced it has entered into agreements with subsidiaries of Synovus Financial Corp. and Capital One Financial sell assets and liabilities of its wholly owned bank subsidiary, World's Foremost Bank, which helps smooth the approval of its merger with rival Bass Pro Shops, according to a company press release.

The competitor will now pay $61.50 a share for Cabela's stock, down from the $65.50 a share price that was announced in October. 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.

Cabela's said it has also reached an agreement with Synovus Financial Corp. of Columbus, Georgia, to take over $1.2 billion in assets of its World's Foremost Bank subsidiary. Following completion of that deal, Cabela's will sell its credit card assets to Capital One, which it said will continue to operate the Cabela's Club credit card program and will continue to operate the card servicing center in Lincoln.

Capital One's struggle to obtain regulatory approval for Cabaela's in-house credit-card issuer had thrown the whole merger plan into doubt earlier this year, but the deal with Synovus, which first emerged last month, could salvage it.

Bass Pro Shops will now buy Cabela's for about $5 billion, $500 million lower than the price agreed upon a year ago.

Cabela's operates more than 80 stores in the US and Canada, including one location in Mitchell and one in Rapid City. "We look forward to completing these transactions for the benefit of our shareholders, Outfitters and outdoor enthusiasts".

Bass Pro Shops CEO Johnny Morris called the agreement "an important step forward".

That also held up the sale of the retail arm to Bass Pro.

Cabela's said on Monday it now expects the Bass Pro merger to close in the third quarter, as planned. The bank transaction will close immediately prior to the closing of the Bass Pro Shops merger. However, according to Cabela's statement, it still needs approval from the company's shareholders, and it will need a few more regulatory approvals as well.

"The issuance of such a "second request" does not indicate that the FTC has concluded that the transaction raises competition concerns", Cabela's said in the filing, but rather "reflects a determination by the FTC that it requires additional information to assess the proposed transaction".

Shares of Cabela's were up 6.6 percent at $56.91 in after-market trade.

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