Genesco chairman and CEO Hal Pennington said in a statement Monday the inquiry follows UBS' "baseless fraud allegations" to get out of its commitment, adding the company will fully cooperate with the inquiry and "not be deterred from enforcing [its] rights under the merger agreement."
Finish Line beat out larger rival Foot Locker for the target in June. Genesco then reported a 19 cent per share loss for its second fiscal quarter, down from a 24 cent per share gain a year earlier. Finish Line and UBS, in turn, asked for information to see if a MAC had occurred. Genesco brought a suit of its own against Finish Line and UBS on Sept. 21 to enforce its $1.3 billion deal, claiming Finish Line breached the merger agreement in not closing the deal, which met with shareholder approval Sept. 17.
In its suit Nov. 15, UBS alleged Genesco had misrepresented its financial state to Finish Line, UBS, Genesco and shareholders, and pointed to Finish Line's "earnings difficulties" and Genesco's "disastrous financial condition," which combined would make for an insolvent company, Reuters reported, citing the filing. — Carolyn Murphy
See Genesco release Nov. 27 See Reuters report Nov. 16 on UBS' action See TheDeal.com story Oct. 30 about Genesco's suit See TheDeal.com story June 18 about Genesco taking Finish Line offer
Comments
I worked tirelessly for 9 years for Genesco. During this time, I witnessed multiple wrong and minipulative practices. In saying that I decided to leave because my Moral and Ethical belielfs didn't aline with theirs. I was a high ranking employee and this suit doesn't surprise me at all!! Neither the suit by its shareholders!!!