New York-based Foot Locker Inc. this morning offered to buy Tennessee-based Genesco Inc. for $1.2 billion—a deal apparently driven by Foot Locker’s desire to gain ownership of Genesco’s Indianapolis-based Hat World unit.
Talk of a possible deal has been brewing for weeks. Women’s Wear Daily reported last month that Foot Locker planned to open its own hat chain, dubbed Champs Sports Just Hats, but later decided to try to establish its presence in that business by buying Genesco.
Genesco owns several other chains, including Journeys and Johnston & Murphy. Hat World accounted for about 23 percent of Genesco’s $1.46 billion in sales in its most recent fiscal year. Hat World, with more than 700 locations, is Genesco’s fastest-growing unit.
Hat World was founded in
Foot Locker is offering $46 a share for Genesco, a premium of $2.59 to Genesco’s closing price yesterday.
Genesco said this morning it will respond to the offer “in due course.”