Bass Pro Shops-Cabela's Merger in Trouble
The Bass Pro Shops-Cabela’s merger may be on hold. The Federal Trade Commission (FTC) has sought more information regarding the transaction, delaying the potential closing deadline. This has now jeopardized the sale of Cabela's financial arm to Capital One. Capital One agreed to pay about $200 million to originate and service Cabela's co-branded credit card for 10 years while acquiring the credit card operations, which is one of the country's biggest issuers by volume. This deal is tied up with the merger, therefore, it needs to get Cabela's permission to withdraw the bank merger act application before it’s denied by the Office of the Comptroller of the Currency. Because Cabela's credit card operation is chartered as a bank, the merger requires the approval of the comptroller.
Total Retail’s Take: It looks like this deal could be unraveling, although there is still some hope. The FTC requested more information in the Anheuser-Busch merger with SABMiller, and then ultimately approved the deal. The added Capital One situation makes the Cabela’s-Bass Pro Shops deal a bit more complicated though. We'll see if this is the next retail merger that gets nixed by the FTC, much like the Staples-Office Depot deal.