An attempted 1-point-5 billion dollar merger between two shoe retailers is no more. Instead, Indiana-based Finish Line is paying Nashville’s Genesco millions for the right to walk away from the deal.
A multipronged legal battle between the two companies began not long after the merger was first announced. Finish Line and its investment bank, UBS, claimed Genesco wasn’t worth 1-and-a-half billion dollars, and sued in New York to be let out of the deal. Meanwhile, in a Davidson County court, Genesco sued for breach of contract and won.
Hearings in the New York case were just about to begin when the settlement was announced this morning. Under the proposed deal, Genesco would get 175 million dollars and a 12 percent share in Finish Line.
Following the announcement, shares in Genesco dropped nearly 20 percent, while Finish Line stock rose more than a dollar per share.
Genesco’s largest stockholder, QVT Financial, has expressed opposition to the settlement. QVT began buying large quantities of stock in Genesco after the Finish Line lawsuits were filed.
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