Shares of Cabela’s Inc. shot up $3.84, or 7.2 percent, to $57.53 Tuesday after it announced a two-step deal that eases one step in securing regulatory clearance for its mega-merger with Bass Pro.

Cabela’s also agreed to reduce the price of its Bass Pro deal to $61.50 per share, lower than the originally agreed upon $65.50-per-share price. Under the revised terms, Bass Pro will pay about $5 billion for Cabela’s, down from $5.5 billion under the agreement first set on October 3, 2016.

Shares of Cabela’s stock had sunk to the mid-$40 range in mid-February, down more than 26 percent compared to the day the merger was announced, as investors grew concerned about the closing of deal due to challenges gaining anti-trust clearance.

Under a new arrangement, Synovus Financial Corp will now buy certain assets of Cabela’s financial division, World’s Foremost Bank, and then resell the credit card portfolio within the unit to Capital One Financial Corp.

As part of separate part of the original Cabela’s-Bass Pro merger, Capital One was expected to acquired World’s Foremost Bank. In late December, however, Capital One said it didn’t expect its part of the deal to be approved by the Treasury Department’s Office of the Comptroller of the Currency by October 3, the date after which either Bass Pro or Cabela’s could terminate their mega-merger.

Although closing the bank deal wasn’t a condition of the merger of Bass Pro and Cabela’s, it supported the changeover and delays led to fears that the overall merger would fall apart. The Wall Street Journal first reported about the discussions with Synovus last month and referred to Synovus’ involvement as the mega-deal’s “potential savior.”

“We’re excited to announce this agreement, which allows us to look ahead with greater certainty toward the completion of our merger with Bass Pro Shops and offers a positive step forward for all parties,” said Tommy Millner, Cabela’s chief executive officer, in a statement. “We look forward to completing these transactions for the benefit of our shareholders, Outfitters and outdoor enthusiasts.”

Johnny Morris, founder and CEO of Bass Pro Shops, said, “We remain excited about the exceptional opportunity we have to continue to serve sportsmen and sportswomen by bringing together Cabela’s, Bass Pro Shops and White River Marine Group. Today’s announcement is an important step forward and we are excited about the opportunity to continue celebrating the great Cabela’s brand with ours as one unified outdoor family for our customers and for conservation.”

Bass Pro and Cabela’s didn’t specifically address the reason for the lower bid. The general downturn at retail as well as weakness in firearms tied to the election of a Republican presidential administration was speculated as a reason.

In reporting fourth-quarter earnings, Millner noted that similar to industry trends, Cabela’s experienced strength in firearms and shooting-related categories primarily early in the quarter. Many firearms suppliers have indicated firearms sales had been running strong early on in anticipation of Hillary Clinton winning the election, but have since softened due to a fewer concerns about gun ownership restrictions under the Trump administration. Millner also noted that later in the quarter, the firearms and shooting-related categories faced the headwind of lapping the impact that the San Bernardino tragedy had a year ago.

The new bank deal could have also played a role in the reduced price.

Cabela’s said on Monday it now expects the Bass Pro merger to close in the third quarter, as planned.

The World’s Foremost Bank transaction is subject to regulatory approvals by Synovus’s primary bank regulators and other customary closing conditions. The World’s Foremost Bank transaction will close immediately prior to the closing of the Bass Pro Shops merger.

The Bass Pro merger remains subject to approval by Cabela’s shareholders, as well as antitrust clearance and other customary closing conditions.

In January, Cabela’s said in a regulatory filing that it received a second request for information from the Federal Trade Commission. The agency reviews corporate mergers to see whether they create monopolies.

“The issuance of such a ‘second request’ does not indicate that the FTC has concluded that the transaction raises competition concerns,” Cabela’s said in the filing, but rather “reflects a determination by the FTC that it requires additional information to assess the proposed transaction.”

The deal will combine Cabela’s 85 stores, which have a stronger U.S. Northwest presence, with Bass Pro’s roughly 100 locations that are concentrated in the U.S. Southeast. The companies have an overlap across Texas, Missouri and Kansas.

A Bass Pro Shops/Cabela’s merger would create a national chain with more than 180 locations, roughly 40,000 workers with control of more than 20 percent of the $50 billion U.S. hunting, camping and fishing market, analysts at Stifel Nicolaus have estimated.

Photo courtesy Cabela’s