The Law Office of Lynnette Ariathurai A Professional Corporation

Business merger between Cabela's and Bass Pro uncertain

When two California companies plan to combine assets and blend into a new, expanded form of their original selves, many challenges can arise in the process. A proposed business merger between Cabela's and Bass Pro Shops is a perfect example. There appears to be some uncertainty regarding merger plans that reportedly has to do with the provider of Cabela's in-house credit card.

World's Foremost Bank, Cabela's credit card partner, was slated to be purchased by another major credit card issuer, Capital One. Complications in the credit card company business merger have interfered with plans for the merger of the sporting goods companies. Capital One has not obtained necessary approval for the purchase. In fact, the company recently issued a statement saying it will likely withdraw its purchase application.

Cabela's quarter profits have plummeted from $78.8 million to $58.1 million, according to recent fourth quarter data. The Federal Trade Commission issued a second request to Cabela's and Bass Pro in December, asking for additional information regarding their planned merger. This request is expected to cause further delays to the proposed business deal.

Regulators are apparently quite concerned about the possible business merger. They are closely scrutinizing the plans since Cabela's and Bass Pro are direct competitors. When two moguls of the same industry start talking about one buying out the other, it typically raises eyebrows in the antitrust community. Many outdoor enthusiasts in California and throughout the nation will obviously be eager to see if the FTC gives consent to the prospective business deal. In the meantime, anyone in this state facing similar business challenges may consult with a business and commercial law attorney for guidance.

 

Source: retaildive.com, "Cabela's-Bass Pro merger further in doubt as credit card business sale falters", Daphne Howland, Feb. 16, 2017

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