After an acrimonious start that prompted Genesco to file suit seeking to complete a deal, Genesco Inc. and The Finish Line Inc. have called off their merger. In September Genesco filed suit in Chancery Court in Nashville, TN, seeking an order for The Finish Line and UBS Securities LLC to complete the transaction.
But under a settlement announced by the two companies yesterday, the proposed merger and a commitment by UBS Securities to provide up to $1.6 billion in funding to facilitate the deal have been canceled. Under the new agreement, Finish Line, No. 154 in the Internet Retailer Top 500 Guide, and USB will pay Genesco, No. 325, $175 million. Finish Line will also issue Genesco just over 6.5 million shares of its common stock.
Genesco and Finish Line also have agreed to a standstill agreement, which specifies that for three years each company will not acquire an ownership interest in the other party or seek or propose to influence or control the management, corporate boards or policies of the other party.
“This agreement is a positive step for Finish Line,” says Finish Line CEO Alan H. Cohen. “With the litigation behind us, we will be able to focus all of our resources and attention on our fiscal 2009 goals and strategic priorities.”
Genesco operates 2,100 stores under the Journeys, Journeys Kidz, Shi by Journeys, Johnston & Murphy, Underground Station, Hatworld, Lids, Hat Shack, Hat Zone, Head Quarters and Cap Connection brands. It operates associated web sites such as Journeys.com, Journeyskidz.com, Shibyjourneys.com, Undergroundstation.com, Johnstonmurphy.com, Lids.com and Lidskids.com.
In addition to FinishLine.com and ManAlive.com, Finish Line currently operates 697 Finish Line stores in 47 states and 94 Man Alive stores in 19 states.
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