Genesco sues The Finish Line over merger deal
Having agreed a merger in June, Nashville-based shoe and hat company Genesco Inc. is suing shoe and apparel firm The Finish Line Inc., which it believes is trying to back out of the planned $1.5 billion buyout.
The lawsuit claims that The Finish Line, which was to acquire all of Genesco’s outstanding common shares, has "developed a case of buyer's remorse". This follows reports that documents to close the deal have been put on hold because of concerns over Genesco’s recent performance.
Chairman and CEO, Hal Pennington, said: "We want a court of competent jurisdiction to enforce our rights under the Merger Agreement and for The Finish Line and UBS [The Finish Line’s Swiss banker] to live up to their obligations." He believes the delay is the result of general unrest in the credit markets.
As the deal is scheduled for closure next week, the company has asked that the trial takes place before the end of October as the financing deal expires on December 31. If the deal is not completed on time, "a massive claim against The Finish Line by Genesco which will likely force The Finish Line into bankruptcy" could ensue, said the company.
