Foot Locker Makes $1.2 Billion Bid For Genesco
Foot Locker is making an unsolicited $1.2 billion cash offer for shoe, hat and accessories retailer Genesco Inc., which said Friday it will evaluate the proposal with its financial adviser Goldman Sachs.
The $46-per-share bid represents a 26% premium to Genesco's average share price during the one-year period prior to April 4, when Foot Locker first sent a letter to Nashville-based Genesco expressing takeover interest.
Genesco shares jumped $5.47, nearly 13%, to $48.88 in early trading on the New York Stock Exchange, well above its previous 52-week high of $44.18.
Genesco operates more than 2,000 stores in the U.S. and Canada under the Journeys, Lids and Underground Station brands, among others. The company also sells shoes wholesale under the Johnston & Murphy brand and under the licensed Dockers brand.
Larger rival Foot Locker, based in New York, operates about 4,000 stores in 20 countries in North America, Europe and Australia through Foot Locker, Footaction, Lady Foot Locker, Kids Foot Locker, Champs Sports and Footquarters chains.
Hal N. Pennington, Genesco's chairman, president and chief executive, did not respond to the April 4 letter from Matthew Serra, Foot Locker's chairman and CEO, that first suggested the deal.
In a follow-up letter released Friday, Serra wrote: "Given Genesco's failure to provide a substantive response to my April 4 letter and recent public speculation, we thought it would be best for both of our organizations, and our respective shareholders, to make our position public."
Foot Locker shares were up 47 cents to $24.09 in early trading on the New York Stock Exchange. Shares have traded between $21.10 and $28 over the last 52 weeks. Lehman Brothers is advising Foot Locker on the proposed takeover.
Genesco has set no deadline for deciding on the Footlocker offer.