Cabela's drops share price to smooth merger with Bass Pro Shops

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 Amended Merger Agreement, Bass Pro Shops will acquire Cabela's for $61.50 per share in cash, representing an aggregate transaction value of approximately $5.0 billion. 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.

The deal is a two-step process under which Synovus will acquire World's Foremost Bank and retain $1.2 billion in deposits, then sell the bank's credit card business to McLean, Virginia-based Capital One.

The new merger terms come amid regulatory scrutiny of the deal, although Cabela's did not offer a reason for the revised price.

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

In the same statement, Johnny Morris, founder and CEO of Bass Pro Shops said, "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".

But it's not a done deal: In December, Cabela's and Bass Pro Shops each received a request for additional information and documents (commonly known as a "second request") from the FTC in connection with their proposed merger, according to a filing with the Securities and Exchange Commission, launching a more involved process that could continue to delay proceedings for several months. "[Bass Pro Shops and Cabela's] really are the best possible example of direct competitors", Wagner told Retail Dive a year ago. Closing is still subject to shareholder and regulatory approval.

The restructured credit card sale marks the first positive step in Bass Pro's pursuit of Cabela's that was initially announced on October 3, after pressure from activist hedge fund Elliott Management, but has run into snags.

Cabela's said on Monday it now expects the deal to close in the third quarter this year.

The closest D.C. -area Bass Pro Shops location is at Arundel Mills in Hanover, Maryland. 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.

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

Vanessa Coleman

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