At 11:42 a.m. CDT Genesco’s stock was down 13.1 percent on nearly seven times its average trading volume after it released negative earnings and its suitor may be rethinking acquiring the company.
Genesco's shares had dropped by $6.40 throughout the day and were trading at $43.63.
The move comes on the heels of this morning’s 2nd quarter results in which the company said merger expenses and other charges caused it to post a 19 cent loss. This performance followed earnings of 24 cents per share in the same quarter of last year.
And the subsequent drop in share price apparently has led potential suitor Finish Line to take a second look at its plans to buy Genesco.
In June, Finish Line agreed to acquire the Nashville company for $1.5 billion or $54.50 per share. At the time that represented a premium of just under 10 percent over Genesco’s previous closing price of $49.60. It also trumped a recently sweetened bid from Foot Locker of $51 per share.
Now, it appears that Finish Line will pay a greater premium than originally intended. Or maybe not?
Following Genesco’s earnings release Finish Line issued a statement saying that it is “disappointed with Genesco's second quarter fiscal 2008 financial results.”
The company went on to say: “Consistent with its responsibilities to The Finish Line's shareholders, the company is evaluating its options in accordance with the terms of the merger agreement.”
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