Genesco breached merger deal, Finish Line says

September 24, 2007
Genesco Inc. is breaching terms of the deal to sell to locally based Finish Line Inc because Genesco is withholding certain financial information from Finish Line and won't grant it access to Genesco's chief financial officer and other financial staff, Finish Line said this morning.

The statement was Finish Line's first official response to last week's lawsuit filed by Genesco, which seeks to force Finish Line to close on the $1.5 billion deal.

Finish Line didn't reveal specifics of its complaint and said it would have no further comment.

Finish Line and its banker, UBS Financial Services, have suggested in recent weeks that a $4.2 million loss suffered by Genesco in its second quarter amounts to a "material adverse" effect that gives them the right to terminate the deal. UBS has said it won't close until it can further review Genesco's finances.

Nashville, Tenn.-based Genesco, which operates mall retailers, including Journeys and Hat World, shot back that Finish Line and UBS are obligated to consummate the agreement despite a downturn in credit markets since the pact was announced in June.

Finish Line is continuing to work on closing documents, the Indianapolis shoe and apparel retailer said in its statement today. The company also said it is reviewing the suit and will take necessary steps to protect itself and its shareholders.
Source: XMLFULL/XMLFull4728.xml

Recent Articles by IBJ Staff

Comments powered by Disqus