Finish Line, Genesco Nearing Settlement In Merger Dispute
The Finish Line and Genesco have "jointly announced a settlement that delays the start of a second trial associated with the botched" $1.5B merger, according to Tom Spalding of the INDIANAPOLIS STAR. The settlement calls for UBS, the banker in the deal, and Finish Line to “pay Genesco $175[M] in cash, along with 12[%] of Finish Line Class A common stock.” Finish Line and Genesco's BODs must approve the agreement. Several analysts said that it would be “prudent to wait to declare victory until the settlement is approved by the boards.” Finish Line, which will pay its portion of the settlement "from cash reserves,'' last summer announced that it would buy Genesco at $54.40 a share and finance “nearly all the purchase by borrowing money” from UBS. However, Finish Line “tried to back out of the acquisition, a move that a Tennessee court rejected in December” (INDIANAPOLIS STAR, 3/4). Morningstar analyst Brady Lemos said Genesco “needed to settle. It was either do that or get involved in an even longer drawn-out court battle.” In Nashville, Wendy Lee notes as part of the settlement, separate court cases in New York federal court and Davidson County (TN) Chancery Court will end (Nashville TENNESSEAN, 3/4). At presstime, shares of Finish Line were trading at $4.39, up 10.58% from yesterday's close of $3.97, while shares of Genesco were trading at $23.95, down 3.31% from yesterday's close of $24.77 (THE DAILY).
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