Credit card hurdle cleared in Bass Pro / Cabela's deal

But shareholders will profit less than under an earlier agreement: Bass Pro will pay $61.50 per share for Cabela's stock, down from $65.50, the Sidney retailer said Monday.

Cabela's also said Georgia bank Synovus will now buy the credit-card unit as a middleman.

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. Capital One previously had agreed to pay about $200 million above what the assets of World's Foremost Bank were worth. Cabela's said that put the value of the deal at $5 billion, down from $5.5 billion, including debt.

The two companies first announced the deal in October.

"We're excited to announce this agreement, which allows us to look ahead with greater certainty toward the completion of our merger with Bass Pro Shops and offers a positive step forward for all parties", said Tommy Millner, Cabela's chief executive officer. Capital One, the proposed buyer of Cabela's banking and credit card businesses, had to back out of the deal due to an unrelated regulatory situation that would have delayed the merger significantly. "[Bass Pro Shops and Cabela's] really are the best possible example of direct competitors", Wagner told Retail Dive past year.

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.

Bass Pro Shops has locations in northeast Denver and Colorado Springs. The similarities and overlap make a merger both rational and a target of careful scrutiny from regulators, according to Scott Wagner, an antitrust expert and partner in law firm Bilzin Sumberg's litigation group - and, clearly, close scrutiny is now ongoing. Synovus will keep the bank's deposits.

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.

With the challenges of today's retail environment, a Cabela's buyout may be the only way to save the brand, Gordon said.

However, the price cut is mostly because of changes in the sale of the Cabela's credit card business.

"This is good news for Cabela's as a company, good news for Cabela's shareholders, and it's also good news for people who work there", Gordon said.

Vanessa Coleman