Judge Rules for Genesco
Nashville, Tenn. A judge ruled Thursday that Genesco Inc. executives did not commit fraud during negotiations over a $1.5 billion acquisition and that fellow mall retailer The Finish Line Inc. must complete the purchase.
Nashville Chancellor Ellen Hobbs Lyle dismissed Finish Line’s claims that Genesco withheld key financial information that could have signaled worse-than-expected earnings after the deal closed in June.
Lyle said Indianapolis-based Finish Line and investment bank UBS AG were sophisticated enough to know what they were getting into with the $54.50-per-share purchase.
UBS has filed a separate federal lawsuit in New York asking that its commitment to finance most of the deal be declared void because the combined entity would go bankrupt and default on its debt payments.
That case is still pending, but Lyle disagreed that the combined company would be doomed.
“The merger has a reasonable chance of succeeding,” she said.
UBS issued a statement saying it disagrees with the court and believes “there are material issues in our client’s and UBS’ favor in this matter.”
Goldman Sachs analyst Brad Cragin said the ruling improves the chances that the buyout will go forward. However, he said the deal is still not a sure thing because UBS AG is suing.
“The judgment in favor of Genesco moves it one step closer to being acquired by Finish Line,” he said. “The ruling also makes clear that litigation surrounding the transaction is far from over and completion of the transaction remains uncertain.”
Amazon MP3 adds digital music from Warner
SEATTLE and NEW YORK Amazon.com and Warner Music Group today announced that customers can now find DRM-free music audio downloads from Warner Music Group on Amazon MP3, Amazon’s a la carte MP3 digital music store.
In addition to purchasing individual songs, Amazon MP3 customers will also be able to access digital music products such as album bundles containing exclusive tracks.
“Our customers are delighted with our DRM-free MP3 service. We have received thousands of emails from our customers since our September launch thanking us for offering the biggest selection of high-quality MP3 audio downloads which play on virtually any music device they own today or will own in the future,” said Bill Carr, Amazon.com vp of digital music. “With the addition of great Warner Music Group content, our customers will discover even more of the music they love on Amazon MP3.”
Leading CE manufactures in flat panel alliance
TOKYO Hitachi, Canon and Matsushita have teamed up to promote the flat panel television industry.
The companies announced Tuesday that they have formed an alliance aimed at reinforcing and growing the liquid crystal display (“LCD”) panel businesses and technologies. According to the companies, they will use their individual strengths –Hitachi’s in liquid crystal, Canon’s in the camera and printing fields, and Matsushita in flat-panel televisions — to help accelerate the development of advanced display technologies.
The companies reported that they have agreed that Canon and Matsushita will, by transfer of shares from Hitachi, each acquire 24.9% of the shares of Hitachi Displays Co., a wholly owned subsidiary of Hitachi engaged in small- and medium-sized LCD panel-related businesses, by March 31, 2008, subject to approvals by regulatory authorities. As a result, Hitachi’s stake in Hitachi Displays is to become 50.2%.