- 3,628
- 1,793
- Joined
- May 10, 2002
Possibly. Thoughts?
http://www.nypost.com/seven/01052008/business/finish_line_may_need_drastic_steps_219203.htm?dlbk
January 5, 2008 -- If Finish Line is forced to complete its ill-fated takeover of rival shoe seller Genesco, the combined company may have to shed assets orsell out to a private-equity shop, sources told The Post.
Finish Line boss Alan Cohen, facing a barrage of questions from analysts on a conference call yesterday, said he wants to "wait and see" whether aNew York court will force Swiss bank UBS, the struggling sneaker chain's adviser, to finance the $1.5 billion buyout of Genesco.
UBS balked at providing the aggressive debt package amid the global credit crisis and a downturn in Genesco's business.
"The merger would be impossible," if UBS prevails in its argument that the combined company would be too weak and burdened with debt to avoidbankruptcy, Cohen said.
Cohen's comments came after Finish Line reported a steeper-than-expected fiscal third-quarter loss.
Finish Line shares plunged 46 cents, or 21 percent, to close at $1.75. Shares of the company have been hammered by more than 80 percent in the lastyear.
Some critics argue that Finish Line - which last week was ordered by a Tennessee judge to complete the deal - actually has plenty of options to keep itselfsolvent after a purchase of Genesco.
Aside from merger synergies that may be understated, the companies would have room to cut administrative costs and capital spending on new stores.
More drastic options could include shuttering stores or even entire divisions.
A source close to Finish Line said the company is "evaluating its options."
John Shanley, an analyst at Susquehanna Financial Group, noted that Finish Line's struggling Man Alive chain, which hawks urban street fashions, isburning cash and that closing it would help stop the bleeding.
The same is true of Genesco's Underground Station unit. If sold, Genesco's Johnston & Murphy chain could fetch hundreds of millions of dollars,industry insiders say.
To get UBS to back off its claim that the merged company would be insolvent, Finish Line and Genesco also might raise capital through a public equityoffering, or even sell a big stake in the merged company to a private-equity firm, said one source close to the situation.
Indeed, former UBS investment banker Ken Moelis, who was hired by Finish Line as the Genesco deal was beginning to unravel, contacted several private equityfirms to gauge their interest in a possible partnership with the combined company, according to testimony in the Tennessee case.
http://www.nypost.com/seven/01052008/business/finish_line_may_need_drastic_steps_219203.htm?dlbk
January 5, 2008 -- If Finish Line is forced to complete its ill-fated takeover of rival shoe seller Genesco, the combined company may have to shed assets orsell out to a private-equity shop, sources told The Post.
Finish Line boss Alan Cohen, facing a barrage of questions from analysts on a conference call yesterday, said he wants to "wait and see" whether aNew York court will force Swiss bank UBS, the struggling sneaker chain's adviser, to finance the $1.5 billion buyout of Genesco.
UBS balked at providing the aggressive debt package amid the global credit crisis and a downturn in Genesco's business.
"The merger would be impossible," if UBS prevails in its argument that the combined company would be too weak and burdened with debt to avoidbankruptcy, Cohen said.
Cohen's comments came after Finish Line reported a steeper-than-expected fiscal third-quarter loss.
Finish Line shares plunged 46 cents, or 21 percent, to close at $1.75. Shares of the company have been hammered by more than 80 percent in the lastyear.
Some critics argue that Finish Line - which last week was ordered by a Tennessee judge to complete the deal - actually has plenty of options to keep itselfsolvent after a purchase of Genesco.
Aside from merger synergies that may be understated, the companies would have room to cut administrative costs and capital spending on new stores.
More drastic options could include shuttering stores or even entire divisions.
A source close to Finish Line said the company is "evaluating its options."
John Shanley, an analyst at Susquehanna Financial Group, noted that Finish Line's struggling Man Alive chain, which hawks urban street fashions, isburning cash and that closing it would help stop the bleeding.
The same is true of Genesco's Underground Station unit. If sold, Genesco's Johnston & Murphy chain could fetch hundreds of millions of dollars,industry insiders say.
To get UBS to back off its claim that the merged company would be insolvent, Finish Line and Genesco also might raise capital through a public equityoffering, or even sell a big stake in the merged company to a private-equity firm, said one source close to the situation.
Indeed, former UBS investment banker Ken Moelis, who was hired by Finish Line as the Genesco deal was beginning to unravel, contacted several private equityfirms to gauge their interest in a possible partnership with the combined company, according to testimony in the Tennessee case.
