Finish Line gets extension on financing commitment from UBS

By Jennifer Chiou

New York, Oct. 11 - The Finish Line, Inc. announced that UBS Loan Finance LLC and UBS Securities LLC have agreed to extend the termination date of the commitment letter for the financing of its proposed acquisition of Genesco Inc. to April 30, 2008 from Dec. 31.

On Sept. 24, the company said it had complied with its obligations under the merger agreement with Genesco and was continuing to work on closing the deal.

As already reported, the statement was in response to Genesco's lawsuit filed Sept. 21 in Chancery Court in Nashville asking the court to require the Finish Line to consummate its merger with Genesco without further delays by the company or UBS. "No more reservation of rights; no more bankers' putting their pencils down," Genesco chairman and chief executive officer Hal N. Pennington previously said in a company news release.

As already reported, in a Sept. 11 letter to the Finish Line, UBS expressed concern about the "apparent deteriorating financial position" of Genesco, according to a prior news release.

While Genesco said it has not experienced a material adverse effect, UBS previously asked for proof.

The Finish Line said that, to date, Genesco has not responded to its requests for financial and other information and for access to Genesco's chief financial officer and financial staff. According to the Finish Line, it is Genesco's failure to provide information that constitutes a breach of the merger agreement.

The Finish Line is reviewing the Genesco lawsuit and plans to take steps to protect the interests of the company and its shareholders.

It was previously reported that the Finish Line was evaluating its options under the agreement after Genesco's disappointing second-quarter financial results, including a loss before discontinued operations of $2.9 million, or $0.13 per diluted share, for the second quarter ended Aug. 4. Genesco, for the same period last year, reported earnings before discontinued operations of $5.9 million, or $0.24 per diluted share.

On Sept. 17, Genesco shareholders approved the June 18 merger agreement that gives them $54.50 in cash, without interest, for each share of Genesco common stock they own. The transaction, valued at an estimated $1.5 billion, is slated to close in the fall. Genesco's Nashville operations will be maintained and the company will become a subsidiary of Indianapolis-based the Finish Line.

Based in Indianapolis, Finish Line is a mall-based specialty retailer.

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