In a filing with the U.S. Securities and Exchange Commission, Legion Partners Asset Management LLC and 4010 Capital LLC said they now own a combined 5.3 percent stake in Genesco and stated they made the acquisition because they Genesco’s shares are ““undervalued and represented an attractive investment opportunity.”
“The Reporting Persons believe that the current market price of the Shares does not reflect the Issuer’s intrinsic value” the filing stated. “In the Reporting Persons’ view, one of the key areas that does not appear to be well understood or fully appreciated by the market is the opportunity for the Issuer to monetize certain segments of its business and return a significant amount of capital to shareholders. Such transactions have become even more actionable given the recently enacted Federal tax law changes. The Reporting Persons are highly focused on collaborating with the Issuer’s management and board of directors (the “Board”) to significantly improve returns on invested capital.”
The investment firms said they may make proposals to Genesco concerning changes to the capitalization, ownership structure, and board structure.
Genesco responded in a statement, “Genesco welcomes open communication with all its shareholders and values constructive input and suggestions that may advance its goal of enhancing shareholder value. We have engaged in various discussions with representatives of Legion Partners and expect to continue a constructive dialog.”
