Bass Pro/Cabela’s Deal Hinges on Bank Workaround

The mega-deal between Bass Pro Shops and Cabela’s appears to be regaining traction, after February reports of a possible collapse at the hands of Capital One and the FTC spread across the web. The Wall Street Journal reports that Columbus, Georgia-based Synovus Financial is in talks with Cabela’s to acquire their in-house banking business—the key cog in an FTC review of the merger that has placed doubt on the over $4 billion deal.

Under the merger’s original agreement, Capital One was set to acquire Cabela’s $5.7 billion in banking assets, mostly receivables from Cabela’s credit card customers; however, Capital One has been unable to garner approval from the FTC on the deal, leaving Bass Pro Shops—who reportedly has no interest in owning a bank—holding the rope.

Synovus Financial, which operates 250 branches in the southeast, would reportedly purchase Cabela’s banking business before reselling it to Capital One, splitting the assets into a $1 billion pool of deposits, held under the Synovus umbrella and a larger, $4 billion pool of debt owned by Capital One. The deal would free Bass Pro Shops and Cabela’s from a lengthy FTC review of Capital One’s anti-money laundering program, which is currently being probed by the State of New York.

Cabela’s bank, dubbed “The World’s Foremost Bank” has 2 million card holders. In 2016, those cardholders charged $21 billion in merchandise sales.

Last year, the banking business generated $543 million in revenue for Cabela’s.

UPDATE: On April 19, details emerged that indicate the acquisition will move forward contingent on participation from Synovus and Capital One, in addition to a modified price tag of $4.00 less per share than original, $65.50 per share announced last fall.