Cabela's Shares Continue to Rise After Cutting Bass Pro Deal Terms

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

As part of the Monday announcement Cabela's said it had also restructured a deal to eventually sell its credit card unit, World's Foremost Bank, to Capital One Financial Corp.

Under the new terms, Bass Pro would pay $61.50 per share to acquire Cabela's, down from $65.50.

Among factors that may be reflected in the lower share price: a retail industry that continues to decline; Cabela's report of poor fourth-quarter earnings; and Synovus' involvement.

Cabela's Inc CAB.N said it agreed to be bought by fellow outdoor goods retailer Bass Pro Shops for a lower price than agreed, and that it would sell its bank unit in a two-step deal as it seeks regulatory clearance for the transactions.

The unit, called World's Foremost Bank, was supposed to be bought by Capital One a year ago, but the deal wasn't able to get timely regulatory approval.

Bass Pro Shops will pay about $500 million less for Cabela's under the new terms of the companies' merger agreement announced Monday.

The renegotiation of the deal was necessary after Capital One ran into issues getting regulatory approval to buy World's Foremost Bank.

"We remain excited about the exceptional opportunity we have to continue to serve sportsmen and sportswomen by bringing together Cabela's, Bass Pro Shops and White River Marine Group", Bass Pro Shops CEO Johnny Morris said in the statement.

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 USA and Canada in a similar space, but with a primary focus on hunting. That amount is $4 less than the price offered in a deal announced in October.

"We look forward to completing these transactions for the benefit of our shareholders, Outfitters and outdoor enthusiasts". "[Bass Pro Shops and Cabela's] really are the best possible example of direct competitors", Wagner told Retail Dive a year ago.

There's also considerable overlap in their customer bases: Bass Pro noted that 45% of its customers also frequent Cabela's. Closing is still subject to shareholder approval and regulatory approval.

"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".

A Bass Pro Shops/Cabela's merger would create a national chain with more than 180 locations, roughly 40,000 workers with control of more than 20 percent of the $50 billion US hunting, camping and fishing market, analysts at Stifel Nicolaus have estimated.

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