Bass Pro to pay less for Cabela's in 2017 acquisition

Posted April 19, 2017

Synovus Financial Corp. will buy certain assets of Cabela's financial division and then resell the credit card portfolio within the unit to Capital One Financial Corp.

Cabela's announced that Bass Pro will pay $61.50 per share for Cabela's stock.

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. Synovus will acquire some assets and liabilities of World's Foremost Bank, including deposits of about $1.2 billion. 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.

Cabela's is now likely to avoid a regulatory roadblock in its plan to sell its business to competitor Bass Pro Shops, saying Monday it reached a deal with a Georgia bank to aid in the sale of its financial arm.

The deal, originally announced in October, will combine Cabela's 85 stores, which have a stronger U.S. Northwest presence, with Bass Pro's roughly 100 locations that are concentrated in the U.S. Southeast.

Bass Pro Shops CEO Johnny Morris called the agreement "an important step forward". "This speaks to one of the greater trends in the industry, in retail but in sporting goods in particular, to create a customer experience that makes it worthwhile to go to a store", IBISWorld analyst Rory Masterson told Retail Dive previous year.

The bank transaction is subject to regulatory approvals by bank regulators and other closing conditions. "[Bass Pro Shops and Cabela's] really are the best possible example of direct competitors", Wagner told Retail Dive past year.

Cabela's shares were up $3.80 from Monday's close and were at $57.49 though mid-morning trading Tuesday. That transaction is expected to close immediately prior to the closing of the Bass Pro Shops merger, according to the statement. Cabela's board of directors unanimously approved the change; now it's up to the shareholders (and the Federal Trade Commission).

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 USA hunting, camping and fishing market, analysts at Stifel Nicolaus have estimated.