to make $75 million, retain deposits in Bass Pro-Cabela’s merger
As Synovus Financial Corp. was reporting a $69.3 million first-quarter profit Monday — roughly 15 hours earlier than planned — the regional bank confirmed it is involved in a mega-deal with outdoors retailers Bass Pro Shops and Cabela’s, and credit-card issuer Capital One, that will net the Columbus-based company a cool $75 million.
“We’re going ahead of schedule with first quarter earnings because the release includes an announcement of our acquisition of certain assets and certain liabilities of World’s Foremost Bank (WFB), a wholly-owned subsidiary of Cabela’s,” Synovus spokesman Lee Underwood said via email shortly after the stock markets closed on Monday.
In a nutshell, to divest Cabela’s of federally scrutinized financial strings attached to its $5.5 billion sale to Bass Pro Shops, Synovus has agreed to purchase the credit-card assets and liabilities from World’s Foremost Bank, which is owned by Cabela’s. When that deal closes, Synovus will immediately sell the card assets to Capital One Bank, a subsidiary of Capital One Financial Corp.
Synovus, however, will keep the roughly $1.2 billion brokered time-deposit portfolio of World’s Foremost Bank, with Cabela’s and Capital One paying the locally based bank $75 million. The whole ball of wax is expected to close in the third quarter of this year — that would be in the July-September timeframe — and is subject to typical regulatory approvals and the closing of the retail merger between Bass Pro Shops and Cabela’s. The acquisition was announced last October.
“This transaction will provide Synovus with additional liquidity to support organic growth, as well as incremental capital that can be utilized to accelerate progress toward achieving our stated long-term (return on assets) and efficiency goals,” Synovus Chairman and Chief Executive Officer Kessel Stelling said in a statement.