Genesco Suing The Finish Line To Complete Buyout Deal

Genesco is suing The Finish Line and “demanding that it complete its $1.5[B] buyout” of the company, according to Wendy Lee of the Nashville TENNESSEAN. Genesco Chair & CEO Hal Pennington in a statement Friday said, “No more delays by The Finish Line and (its bank) UBS. … We want a court … to enforce our rights under the merger agreement and for The Finish Line and UBS to live up to their obligations.”  Genesco shareholders approved the buyout deal last week, but The Finish Line said it is re-evaluating the bid and that its lender, UBS, had “stopped working on the closing papers, citing concerns over Genesco’s recent financial performance.” In its suit, Genesco accuses The Finish Line of “trying to undermine the deal by ‘slow-walking the financial transaction,’ making unsupported claims that Genesco had breached its contract and casting public doubt on the closing of the sale.” Neither The Finish Line nor UBS would comment on the lawsuit, but some analysts “share Genesco’s belief that Finish Line and its bank are stalling.” Morningstar stock analyst Brady Lemos: “UBS and The Finish Line have been dragging their feet, buying them more time to find some skeletons in the closet that they could consider a material adverse effect to get out of the deal completely or lower the price or change the terms” (Nashville TENNESSEAN, 9/22).  At presstime, shares of Finish Line were trading at $5.25, down 0.76%, while shares of Genesco were trading at $47.05, down 1.16% (THE DAILY).