Genesco Rejects Foot Locker Bid But Leaves Door Open
Genesco yesterday “roundly rejected” Foot Locker’s $1.2B bid to buy the company in a letter from CEO Hal Pennington to Foot Locker Chair & CEO Matt Serra, according to Zachery Kouwe of the N.Y. POST. With Foot Locker offering $46 per share, Pennington “disclosed that in an earlier discussion, Serra indicated he could buy Genesco for between $48 and $50 a share.” Pennington wrote, “I note that when you called me to inform me of your April 4 letter, you said, ‘Of course we can go higher.’” One hedge fund investor who owns Genesco shares said, “By undercutting them and raising the expectations of the market, you make clear the company is worth a lot more.” Kouwe notes the “next step” for Foot Locker would be to “launch a proxy battle,” and the company has hired proxy solicitation firm InnisFree (N.Y. POST, 4/24). Foot Locker Senior VP & Chief Information Officer Peter Brown “didn’t rule out the possibility of more negotiations.” Brown: “We continue to consider all of our options.” Morningstar analyst Brady Lemos said, “I still think the deal has a pretty good chance of going through closer to $50 per share” (Nashville TENNESSEAN, 4/24). Shares of Genesco rose 1.2% yesterday to $50.56. At presstime, shares were trading at $50.85, up 0.57% from yesterday’s close (THE DAILY).
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