Footwear retailers shares are skyrocketing on a new report that a British retailer may be in talks to acquire Finish
Line Inc (NYSE: FINL).
Shares of the footwear retailer moved up 12 percent in 10 minutes on Thursday afternoon.
According to the New York
Post, British-based Sports Direct, who owns iconic brands Everlast and Kangol, is in direct negotiations to buy Finish
Line.
An acquisition could be announced in the coming weeks, according to a source close to the situation.
Sports Direct already owns an 8 percent stake in Finish Line.
Finish line experienced a roller coaster trading day, with shares now up nearly 4 percent following the news. Competitor
Foot Locker, Inc. (NYSE: FL) also saw a sharp
spike in share price after the report was released.
A Susquehanna analyst is predicting a $13.30 share takeover price, but if the deal does not go through, expects shares to drop
to $8 levels.
Investors appear to be down on footwear retailers as its biggest retail partners continue to focus
their efforts on direct-to-consumer channels. Nike Inc (NYSE: NKE)'s second earnings call focused heavily on the company’s direct-to-consumer offensive
strategy.
Finish Line is also boosting its e-commerce efforts, particularly in mobile, where over 70 percent of its digitial traffic has
switched over. Finish Line CEO Sam Sato says the company will invest $15 million to upgrade its speed in mobile.
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