Nashville, Tenn., Investment bank UBS AG has stopped working on closing documents for The Finish Line Inc.’s buyout of Genesco Inc. because of concerns about Genesco’s financial performance since the deal was announced, according to the Associated Press.
Finish Line said on Wednesday that UBS Loan Finance LLC and UBS Securities LLC have asked for additional information before signing off on the $1.5 billion deal for Genesco.
Genesco’s chairman and CEO Hal N. Pennington responded in a letter released publicly to Finish Line that UBS’ reluctance is unrelated to the financial performance at the Nashville-based retailer.
“They are now looking for a way to back out of their commitment—in our view, not because of Genesco’s results but because the upheaval in the credit markets makes this deal less profitable for them,” Pennington said in the letter. “We are not going to allow the litigation consulting firm they have hired to go on a fishing expedition.”
Genesco’s shareholders approved the buyout on Monday. Finish Line said in a release that it is still working toward the closing, though “it continues to evaluate its options in accordance with the terms of the merger agreement.”