Foot Locker Inc. (FL) to Acquire Genesco
Specialty retailer Foot Locker (FL 22.11, +0.02), recently rumored to be a takeover candidate itself, is said to be on the verge of making an offer to acquire Genesco (GCO 42.65, +3.05).
This is the word on the street anyway, according to Women's Wear Daily, which is a respected industry publication. This isn't new speculation, though, as the same publication last week indicated Foot Locker was getting ready to make an acquisition.
Genesco wasn't so narrowly defined as the object of its affection, but it was believed to be the most likely target in a circle that also included Famous Footwear, which is owned by Brown Shoe (BWS), Rack Room Shoes and Shoe Carnival (SCVL)
It is believed Foot Locker will make a tender offer for Genesco in the range of $44 to $46 per share. The midpoint computes to an approximately 14% premium over Friday's closing price. However, Women's Wear Daily said sources familiar with the transaction have noted Foot Locker might be prepared to go as high as $48 per share.
The twist on today's report is that Foot Locker will likely have to go after Genesco in a hostile manner since Genesco's board will reportedly rebuff any tender offer.
This news has naturally given Genesco's stock a healthy boost in today's trading. The risk for speculators is that the deal never comes to fruition. Foot Locker itself is a case in point.
Shares of FL ran to as high as $28 per share in the wake of rumors about its takeover status. As the company downplayed the rumors, though, its stock rolled over as the market was cognizant the company's fundamental condition didn't support the expeditious jump in its stock price.
--Patrick J. O'Hare, Briefing.com
This is the word on the street anyway, according to Women's Wear Daily, which is a respected industry publication. This isn't new speculation, though, as the same publication last week indicated Foot Locker was getting ready to make an acquisition.
Genesco wasn't so narrowly defined as the object of its affection, but it was believed to be the most likely target in a circle that also included Famous Footwear, which is owned by Brown Shoe (BWS), Rack Room Shoes and Shoe Carnival (SCVL)
It is believed Foot Locker will make a tender offer for Genesco in the range of $44 to $46 per share. The midpoint computes to an approximately 14% premium over Friday's closing price. However, Women's Wear Daily said sources familiar with the transaction have noted Foot Locker might be prepared to go as high as $48 per share.
The twist on today's report is that Foot Locker will likely have to go after Genesco in a hostile manner since Genesco's board will reportedly rebuff any tender offer.
This news has naturally given Genesco's stock a healthy boost in today's trading. The risk for speculators is that the deal never comes to fruition. Foot Locker itself is a case in point.
Shares of FL ran to as high as $28 per share in the wake of rumors about its takeover status. As the company downplayed the rumors, though, its stock rolled over as the market was cognizant the company's fundamental condition didn't support the expeditious jump in its stock price.
--Patrick J. O'Hare, Briefing.com
Labels: FL, Foot Locker Inc., Genesco
posted by Stock Administrator @ 7:21 AM
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