Bass Pro Shops and Cabela’s Inc. (NYSE: CAB) are free to combine after the Federal Reserve approved a crucial step this week.
The Fed informed Sidney, Nebraska-based Cabela’s on Wednesday it could move forward with the sale of its World’s Foremost Bank subsidiary to Synovus Bank, according to a U.S. Securities and Exchange Commission filing. The Georgia banking company plans to sell the division’s credit card assets to Capital One.
The SEC filing indicates all regulatory approvals have now been met. The Federal Trade Commission approved Bass Pro’s $5 billion purchase of Cabela’s in July, and later that month, Cabela’s shareholders gave the green light to the transaction.
According to the SEC filing, Bass Pro and Cabela’s cannot close the transactions earlier than Sept. 21 under the Fed ruling.
“We look forward to completing the transaction later this month,” Bass Pro founder Johnny Morris said in an emailed statement, noting the Fed’s approval “was an important day for our company, the outdoor community and for conservation.”
Cabela’s is expected to later issue a closing date, according to the SEC filing.
The acquisition proposed in October 2016 originally was expected to close in the first half of 2017. The companies granted multiple examination extensions to regulatory bodies, pushing back the expected closure date to the third quarter, according to Springfield Business Journal archives. The FTC ruling declared the deal would not create a monopoly.
Through the deal, Bass Pro would take Cabela’s private and nearly double its store count to 184 from 99. With the completion of the deal, Bass Pro would become the largest outdoor retailer by store count, outpacing its closest competitor Gander Mountain’s 150 locations. Morris is slated to become CEO and majority shareholder of the combined entity.
The companies reportedly have combined annual revenue of roughly $8.6 billion.
During the second quarter, Cabela’s posted net income of $28.3 million, a 25 percent drop from the same quarter a year earlier, according to a news release.
CAB shares rose by roughly 13 percent yesterday following the latest SEC disclosure. Shares were trading at $61.01 as of 11:14 a.m., compared with a 52-week range of $45 to $63.60.
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