Genesco Rejects Foot Locker Bid

Footwear and hat retailer Genesco(GCO Quote - Cramer on GCO - Stock Picks) walked away from Foot Locker's(FL Quote - Cramer on FL - Stock Picks) $1.2 billion takeover bid Monday, saying the offer was not in shareholders' best interests.

Nashville, Tenn.-based Genesco issued a statement saying its board had considered and unanimously rejected the larger Foot Locker's offer of $46 a share. Genesco said the board reached the decision after consultation with its financial adviser, Goldman Sachs(GS Quote - Cramer on GS - Stock Picks) and its legal adviser, Bass, Berry & Sims.

"Our board unanimously rejected the proposal and concluded that it did not reflect the long-term value of Genesco, including its strong market position and future growth prospects," Chairman and CEO Hal N. Pennington said in a statement.

On Friday, Foot Locker went public with its offer and released two letters it had sent to Genesco outlining its plans. The company expressed disappointment at the lack of a "substantive response." Genesco returned the favor on Monday and released a copy of the letter Pennington sent to Foot Locker Chairman and CEO Matthew D. Serra.

In the letter, Pennington refers to two earlier takeover discussions he had with Serra.

"In the first discussion, you indicated an interest in making a proposal to buy the company for $48-$50 per share in cash," Pennington wrote. "Further, I note that when you called to inform me of your April 4 letter, you said, 'Of course, we can go higher.'"

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