Dive Brief:

• Synovus Financial Corp., a small U.S. bank based in Columbus, GA, could help salvage the proposed $5.5 billion merger between outdoor retailers Bass Pro Shops and Cabela’s with a deal to facilitate bank card products issuer Capital One’s takeover of Cabela’s credit card business, sources told The Wall Street Journal.

• While the discussion is described as unsettled, sources said an agreement likely would entail Synovus re-selling Cabela’s credit card business to Capital One while keeping the $1 billion in deposits held by Cabela’s bank, helping Capital One sidestep a protracted regulatory review process and accelerating the deal's completion.

• In January, Capital One said it expected to withdraw its application to take over Cabela’s credit card operation, a development that Cabela’s said in February could undermine its agreement with privately held Bass Pro.

Dive Insight:

Rumors of a Cabela’s sale brewed for months before Bass Pro Shops agreed last fall to acquire its rival with a bid that outpaced a competing offer from private equity firm Sycamore Partners, working with credit company Synchrony Financial.

Cabela's and Bass Pro Shops have a lot in common. Both were founded in roughly the same era and roughly the same area of the country, with a similar number of stores sharing a destination-like shopping approach. “This speaks to one of the greater trends in the industry, in retail but in sporting goods in particular, to create a customer experience that makes it worthwhile to go to a store," IBISWorld analyst Rory Masterson told Retail Dive last year. “It’s about bringing customers in to brick-and-mortar stores. It invites them to consider buying extra things that they might not have been considering going in."

There’s considerable overlap in Cabela’s and Bass Pro’s customer bases as well. Bass Pro noted that 45% of its customers also frequent Cabela’s. The similarities and overlap make a merger both rational and a target of careful scrutiny from regulators, according to Scott Wagner, an antitrust expert and partner in law firm Bilzin Sumberg’s litigation group. “[Bass Pro Shops and Cabela's] really are the best possible example of direct competitors," Wagner told Retail Dive last year. "And that always raises antitrust concerns, especially in a market of this size and a transaction of this size.” 

Those concerns continue to haunt the deal: In December, Cabela's and Bass Pro Shops each received a request from the Federal Trade Commission for additional information and documents (commonly known as a “second request”) according to a filing with the Securities and Exchange Commission, launching a more involved process that promised to delay proceedings for several months. Capital One’s problems with its own acquisition of Cabela’s credit card unit subsequently plunged the deal further in doubt. The complex proposal reportedly in the works with Synovus could be an 11th-hour reprieve.