Bass Pro lowers price for Cabela's under new merger terms

Faith Castro
April 19, 2017

Cabela's yesterday announced a revised deal to sell its retail and bank businesses.

Cabela's announced on Monday that Bass Pro Shops will acquire the hunting mega-store company for $5 billion, or approximately $61.50 per share in cash, which marks a $500 million price cut from the initial October buyout terms.

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 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. Capital One originally planned to buy both of Cabela's financial assets, but regulatory issues held up the deal until Synovus stepped in.

Cabela's Inc. said Monday it has agreed to sell itself to Bass Pro Shops at a discount.

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.

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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".

The purchase could impact Bristol business as the twin city is one of the rare locations in the USA that has both a Bass Pro Shops and Cabelas in the same market- separated by just a few miles on Intestate 81.

The Federal Trade Commission, which regulates and enforces antitrust laws, had sought more information from the companies about the deal. "We look forward to completing these transactions for the benefit of our shareholders, Outfitters and outdoor enthusiasts".

Although closing the bank deal wasn't a condition of the merger of Bass Pro and Cabela's, it supported the changeover and delays led to fears that the overall merger would fall apart. "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 past year.

Bass Pro Shops now expects to pay less to acquire outdoor retail rival Cabela's with the deal expected to close by the third quarter of this year.

Cabela's employs roughly 2,000 of the 6,800 people who live there, but the headquarters would move to Springfield, Missouri - Bass Pro's home - once the deal closes.

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