Multichannel footwear and accessories merchant Genesco Inc. has rejected Foot Locker Inc.’s unsolicited proposal to acquire all its outstanding shares for $1.2 billion or $46 per share.
Foot Locker – rumored to be an acquisition target itself – first made the proposal to Genesco in a letter April 4. A follow-up letter, sent April 19, reiterated the proposal and Foot Locker’s belief that it represents “significant value” to Genesco’s shareholders, according to a statement from Foot Locker.
The $46-per-share offer represents a 26 percent premium to the average share price during the one-year period preceding the April 4 letter, according to the company.
Genesco’s board of directors apparently does not agree with that assessment, however.
The proposal does not “reflect the long-term value of Genesco, including its strong market position and future growth prospects,” Hal N. Pennington, chairman and CEO of Genesco, said in a statement.
The board came to its conclusion after consulting with its financial advisor, Goldman, Sachs & Co., and its legal advisor, Bass, Berry & Sims PLC.
As of noon on Monday, Genesco’s stock was trading at $50.70 per share, up from $43.66 at the close of business April 19, the day before Foot Locker’s bid was made public.
Genesco, a Nashville-based specialty retailer, 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, Hatworld, Lids and Hat Zone. It also operates several e-commerce Web sites and mails catalogs for its Journeys and Journeys Kidz brands.