Genesco Sues to Complete $1.5B Buyout
Nashville, Tenn., Genesco Inc. is suing The Finish Line Inc. to complete its $1.5 billion buyout, Genesco announced Friday.
The lawsuit seeks an order to enforce Finish Line's agreement with investment bank UBS AG to finance most of the deal. UBS announced earlier it had stopped processing the closing documents for the deal because of concerns about Genesco's financial performance since the deal was struck.
Genesco's chairman and CEO, Hal N. Pennington, has accused UBS of trying to back out of the deal because of upheaval in the credit market and not because of Genesco's financial performance.
"No more delays by The Finish Line and UBS; no more reservation of rights; no more bankers' putting their pencils down," Pennington said in a release. "We want a court of competent jurisdiction to enforce our rights under the Merger Agreement and for The Finish Line and UBS to live up to their obligations."
Genesco said late last month that it swung to a loss of $4.2 million in the quarter ended Aug. 4. That compared to a profit of $5.9 million in the year-ago quarter.