Buying Cabela's Still a Bad Idea for Bass Pro Shops
It's not too late for Bass Pro Shops to back out of its acquisition of Cabela's (NYSE: CAB). Sure, it was a lengthy and expensive process getting the deal through the Federal Trade Commission approval process, and Cabela's shareholders just approved the $5 billion merger, despite the purchase price dropping from the original $5.5 billion offer. While it might cost Bass Pro a pretty penny in breakup fees if it did back out now, it ultimately could be cheaper for the sporting goods retailer in the long run, rather than going forward and consummating the deal.
The two chains are still awaiting approval from the Federal Reserve, which has to sign off on the sale of Cabela's credit card operation, World's Foremost Bank, to Synovus Financial (NYSE: SNV). Between now and Oct. 3 -- the deadline for closing the deal -- Bass Pro Shops can still walk away from making a grave error. It should consider doing so.
Image source: Bass Pro Shops.
Source: Fool.com
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