ATLANTA — In response to a lawsuit filed against The Finish Line last week by Genesco Inc., the retailer fired back a salvo of its own on Monday, saying Genesco has not complied with requests for financial information, which constitutes a breach of its merger agreement.
Genesco filed suit against The Finish Line last week in Chancery Court in Nashville, Tenn., seeking an order requiring its suitor to consummate its merger with Genesco and to enforce The Finish Line’s rights against UBS AG under the commitment letter for financing the transaction.
The Finish Line, which said it would acquire Genesco for $1.5 billion, or $54.50 per common share, started getting cold feet last month when Genesco reported a loss before discontinued operations of $2.9 million, or 13 cents per diluted share, in the second quarter ended Aug. 4. The Finish Line immediately put out an announcement saying it was disappointed with Genesco’s results and that it was re-evaluating its options.
Commenting on the filing, Hal N. Pennington, chairman and CEO of Genesco, said, “No more delays by The Finish Line and UBS; no more reservation of rights; no more banker’s putting their pencils down. 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.
“We have launched this litigation in an effort to speed consummation of the merger,” he continued, “and to enforce impartial review of the aspersions that The Finish Line and its bankers have cast on Genesco’s business and reputation. Commencing litigation is always a difficult decision, but continued delay by The Finish Line and UBS is simply not acceptable.”
Earlier this month, UBS expressed concern in a letter to The Finish Line about Genesco’s financial health and asked for access to all of Genesco’s financial records.