Shares of Finish Line(FINL Quote) vaulted as much as 55% Monday after the shoe retailer reached a settlement that will end its embattled plan to purchase larger rival Genesco(GCO Quote).
Finish Line and Genesco said they have requested a one-day delay in the start of a trial over the matter because they expect to reach a settlement. The prospective deal calls for the merger agreement, along with a financing commitment from investment bank UBS, to be terminated.
In exchange, the proposed settlement calls for UBS and Finish Line to pay Genesco $175 million cash and a number of Finish Line shares equal to 12% of its outstanding stock.
Finish Line agreed in June to buy Genesco -- which is more than twice the size of Finish Line by market capitalization -- for $54.50 a share, or $1.5 billion. Finish Line began to express doubts about the deal, however, two months later, after Genesco posted particularly weak quarterly results. ...
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