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Strategies & Market Trends : Speculating in Takeover Targets -- Ignore unavailable to you. Want to Upgrade?

To: richardred who wrote (1659)	4/20/2007 1:53:35 PM
From: richardred	Respond to of 7253

Foot Locker Makes $1.2B Bid for Genesco Friday April 20, 12:49 pm ET By Erik Schelzig, AP Business Writer Foot Locker Offers $1.2B for Nashville-Based Accessories Retailer Genesco NASHVILLE, Tenn. (AP) -- Foot Locker Inc., which wants to expand into the specialty footwear sector, went public Friday with an unsolicited $1.2 billion cash bid for retailer Genesco Inc. The $46-per-share bid represents a 26 percent premium to Genesco's average share price during the one-year period prior to April 4, when Foot Locker first sent a letter to Nashville-based Genesco expressing takeover interest. Genesco said it will evaluate the proposal with its financial adviser Goldman Sachs. Genesco shares jumped $6.24, more than 14 percent, to $49.65 in midday trading on the New York Stock Exchange, well above its previous 52-week high of $44.18. Genesco operates more than 2,000 stores in the U.S. and Canada under the Journeys, Lids, Hat World and Underground Station brands, among others. The company also sells shoes wholesale under the Johnston & Murphy brand and under the licensed Dockers brand. Johnston & Murphy bills itself as the "Shoemaker to the American Presidents" because it has designed a set of footwear for each president since Millard Filmore in 1850. Larger rival Foot Locker, based in New York, operates about 4,000 stores in 20 countries in North America, Europe and Australia through Foot Locker, Footaction, Lady Foot Locker, Kids Foot Locker, Champs Sports and Footquarters chains. J.P. Morgan Securities analyst Robert Samuels said in a note to investors that the offer price could improve because the acquisition would help Foot Locker diversify and depend less on products made by Nike Inc., while expanding the company's square footage. "(Genesco) represents one of the few footwear retailers with meaningful square footage growth prospects from their Hat World" as well as through the women's shoe store Shi by Journeys, Samuels said. Hal N. Pennington, Genesco's chairman, president and chief executive, did not respond to the April 4 letter from Matthew D. Serra, Foot Locker's chairman and CEO, that first suggested the deal. In a follow-up letter released Friday, Serra wrote: "Given Genesco's failure to provide a substantive response to my April 4 letter and recent public speculation, we thought it would be best for both of our organizations, and our respective shareholders, to make our position public." Foot Locker shares were up 66 cents, or 2.8 percent, to $24.28 in midday trading on the New York Stock Exchange. Shares have traded between $21.10 and $28 over the last 52 weeks. Lehman Brothers is advising Foot Locker on the proposed takeover. Genesco has set no deadline for deciding on the Foot Locker offer. Foot Locker: footlocker-inc.com Genesco: genesco.com biz.yahoo.com