Finish Line agrees to purchase retailer Genesco for $1.5 billion

Specialty retailer Finish Line Inc. said Monday it agreed to pay about $1.5 billion for footwear and accessories retailer Genesco Inc., which recently had rejected a lower offer from Foot Locker Inc.

Genesco shares rose more than 8% on news of the deal.

Finish Line, a leading mall-based retailer based in Indianapolis, said combined sales of the companies amounted to about $2.8 billion from 2,870 retail stores in the United States, Canada and Puerto Rico.

Finish Line agreed to pay $54.50 a share, about 6.8% more than the $51 a share offered two weeks earlier by Foot Locker. The Finish Line offer marks a premium of 9.8% over Genesco’s closing price Friday.

Genesco had said the Foot Locker bid was not in the best interest of shareholders. The firm had been reviewing alternatives to increase its stock price.

Genesco shares rose $4.15, or 8.4%, to $53.75.

Finish Line shares fell $1.10, or 8.7%, to $11.53.

Finish Line operates 694 Finish Line stores in 47 states, 93 Man Alive stores in 19 states and 15 Paiva stores in 10 states.

Nashville-based Genesco sells shoes, hats and accessories in more than 2,000 retail stores in the U.S. and Canada under store names including Journeys, Johnston & Murphy, Underground Station, Hatworld and Lids.