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Capital One's Credit Card Deal with Cabela's Faces Delay
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In a setback, Capital One Financial Corporation’s (COF - Free Report) proposed credit card deal with Cabela's Incorporated is facing delay. Previously, the deal was expected to close in first-half 2017, subject to the closing of Bass Pro Shops' acquisition of Cabela's, regulatory approval and the fulfillment of other customary closing conditions as well.
On Thursday, Cabela’s stated in a regulatory filing that the Federal Trade Commission (FTC) has sought for additional information, commonly known as “second request”, on Bass Pro Shops’ $5.5 deal to acquire Cabela’s. The Sidney, NE-based outdoor sports equipment retailer also noted, “The issuance of such a “second request” does not indicate that the FTC has concluded that the transaction raises competition concerns.”
Cabela’s still anticipates obtaining regulatory clearance on its merger deal with Bass Pro during the first half of this year. However, the separate deal with Capital One, which forms part of the Bass Pro’s acquisition agreement, is facing a road block as well.
Per the filing, Capital One expects to receive approval from the Office of the Comptroller of the Currency, not before Oct 3, 2017 – the date after which related parties may terminate the deal. In Oct 2016, Capital One announced that it had entered into a 10-year partnership agreement to originate and service Cabela’s co-branded credit card and also agreed to acquire credit card operations from Cabela's.
Further, Cabela’s stated in the filing that the companies are exploring alternative structures that could allow them in closing the deals on or before Oct 3, 2017.
Cabela’s stock suffered more than 5% decline on Friday, while Capital One’s shares did not experience any material impact.
While it cannot be concluded with certainty when the deal will actually be completed, we remain optimistic for the closure of the deal within the latest stipulated time. The deal seems to be a strategic one for Capital One, which expects that the partnership with Cabela’s will provide the former a solid platform for future growth as well as returns in its Partnership credit card business.
Over the past one year, Capital One shares increased 23.4%, outperforming the 18% growth recorded for the Zacks categorized Consumer Loan industry.
Currently, Capital One carries a Zacks Rank #3 (Hold).
Stocks to Consider
E*TRADE Financial Corporation : Over the last 60 days, the Zacks Consensus Estimate for 2016 increased 2.2% to $1.83 and advanced 6.9% to $1.87 for 2017. The company boasts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Meta Financial Group, Inc. (CASH - Free Report) : Over the last 60 days, the Zacks Consensus Estimate advanced 11.8% for 2016 to $6.62 and 14.7% to $7.80 for 2017. The company sports a Zacks Rank #1.
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Capital One's Credit Card Deal with Cabela's Faces Delay
In a setback, Capital One Financial Corporation’s (COF - Free Report) proposed credit card deal with Cabela's Incorporated is facing delay. Previously, the deal was expected to close in first-half 2017, subject to the closing of Bass Pro Shops' acquisition of Cabela's, regulatory approval and the fulfillment of other customary closing conditions as well.
On Thursday, Cabela’s stated in a regulatory filing that the Federal Trade Commission (FTC) has sought for additional information, commonly known as “second request”, on Bass Pro Shops’ $5.5 deal to acquire Cabela’s. The Sidney, NE-based outdoor sports equipment retailer also noted, “The issuance of such a “second request” does not indicate that the FTC has concluded that the transaction raises competition concerns.”
Cabela’s still anticipates obtaining regulatory clearance on its merger deal with Bass Pro during the first half of this year. However, the separate deal with Capital One, which forms part of the Bass Pro’s acquisition agreement, is facing a road block as well.
Per the filing, Capital One expects to receive approval from the Office of the Comptroller of the Currency, not before Oct 3, 2017 – the date after which related parties may terminate the deal. In Oct 2016, Capital One announced that it had entered into a 10-year partnership agreement to originate and service Cabela’s co-branded credit card and also agreed to acquire credit card operations from Cabela's.
Further, Cabela’s stated in the filing that the companies are exploring alternative structures that could allow them in closing the deals on or before Oct 3, 2017.
Cabela’s stock suffered more than 5% decline on Friday, while Capital One’s shares did not experience any material impact.
While it cannot be concluded with certainty when the deal will actually be completed, we remain optimistic for the closure of the deal within the latest stipulated time. The deal seems to be a strategic one for Capital One, which expects that the partnership with Cabela’s will provide the former a solid platform for future growth as well as returns in its Partnership credit card business.
Over the past one year, Capital One shares increased 23.4%, outperforming the 18% growth recorded for the Zacks categorized Consumer Loan industry.
Currently, Capital One carries a Zacks Rank #3 (Hold).
Stocks to Consider
E*TRADE Financial Corporation : Over the last 60 days, the Zacks Consensus Estimate for 2016 increased 2.2% to $1.83 and advanced 6.9% to $1.87 for 2017. The company boasts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Meta Financial Group, Inc. (CASH - Free Report) : Over the last 60 days, the Zacks Consensus Estimate advanced 11.8% for 2016 to $6.62 and 14.7% to $7.80 for 2017. The company sports a Zacks Rank #1.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>