Foot Locker Makes Run at Genesco

Updated from 8:51 a.m. EDT

Shares of footwear retailer Genesco(GCO Quote - Cramer on GCO - Stock Picks) were off and running Friday after Foot Locker(FL Quote - Cramer on FL - Stock Picks) offered to buy the company for $1.2 billion.

Shares of Genesco recently were up $5.88, or 13.6%, to $49.29, well above the proposed buyout price of $46 a share. The company said it is considering Foot Locker's offer.

Foot Locker itself has been the subject of takeover speculation, with shares jumping last year on the belief that the company would become yet another retailer to be snapped up in a private equity buyout. In August, Foot Locker confirmed during a conference call that it had hired Evercore Partners to review strategic options.

Now the shoe is on the other foot.

Rumors of a Genesco takeover surfaced about a month ago when Women's Wear Daily reported that the New York-based Foot Locker was considering a possible hostile bid for its Nashville, Tenn.-based rival.

Foot Locker Chairman and CEO Matthew Serra made the proposal to Genesco President, Chairman and CEO Hal Pennington in an April 4 letter. The company sent a follow-up letter on Thursday reiterating its position.

Foot Locker said its $46-a-share bid represents a 26% premium to the average share price during the one-year period preceding the letter.

Genesco shares closed at $43.41 on Thursday, and given their big surge Friday, it's likely investors are looking for a higher offer. For its part, Foot Locker signaled that it might raise its price.

« Previous Page

1 2

Next Page »