Genesco, Finish Line agree to terminate merger
Genesco Inc, The Finish Line Inc. and UBS have entered into a definitive agreement for the termination of a proposed merger between the two merchants. In addition, all litigation among the three parties has been settled.
The deal calls for UBS and Finish Line to pay Genesco an aggregate of $175 million in cash along with 12% of Finish Line's stock. That transaction is expected to take place on Friday.
In June, The Finish Line agreed to acquire Genesco for approximately $1.5 billion. However, UBS AG, which had agreed to finance most of The Finish Line's offer, reportedly stopped working on the agreement as a result of concerns about Genesco's financial performance.
In September, Genesco filed a suit seeking a court order requiring the shoe and apparel retailer to consummate its deal to acquire Genesco. The Finish Line Inc. later accused Genesco of breaching the merger agreement between the two multichannel merchants, saying Genesco failed to supply certain financial information.
At that time, Genesco sent a letter to The Finish Line stating that it believed UBS was looking for a way out of the commitment because of the upheaval in the credit markets.
Genesco sells footwear, headwear and accessories in more than 2,000 retail stores in the United States and Canada. Its brands include Journeys, Journeys Kidz, Johnston & Murphy, Lids and Hat World. It also operates several e-commerce Web sites and mails catalogs for its Journeys and Journeys Kidz brands.