Feds Dubious of Bass Pro/Cabelas Merger

Concerning the Bass Pro Shops purchase of Cabela’s, industry watcher Jim Shepherd of The Outdoor Wire has these observations:
 
The Associated Press is reporting that federal regulators are putting the brakes on the pace of Bass Pro Shops’ acquisition of Cabela's (NYSE: CAB). It seems the regulators want more time to closely examine the $5.5 billion deal. Since it is well over the $78 million dollar benchmark the Federal Trade Commission uses for scrutiny, it will likely include a store-by-store, city-by-city look at markets where BPS/Cabela's both operate.
 
In some cities, there are stores in very close proximity of each other. In both Bristol, Virginia and Chattanooga, Tennessee, for example, new or nearly-new stores of both brands are located in sight of each other. Even if the deal closes, it's not likely both stores would remain open any longer than absolutely necessary.
 
And it is a big deal. When combined (if combined as-is), the result would be a 182-store chain with 40,000 employees. Great if you're looking for economies of scale and pricing leverage over vendors, but BPS is paying a premium figure for Cabela's stock, which hasn’t been at that value in the past 30 months.
 
But the FTC is concerned about such a deal unfairly impacting other retailers. In May of this year, the FTC took a "closer look" at the Family Dollar/Dollar Tree deal. As a result, 330 stores had to be sold before the FTC approved.
 
I (Jim Sheperd) am hearing that should the deal be delayed because of overlap concerns, there's a closure strategy ready, but no one's talking in either Sidney, Nebraska or Springfield, Missouri – at least not for attribution. 

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