Foot Locker, Inc. has signed a definitive agreement with Footstar, Inc. to purchase approximately 350 of its Footaction athletic footwear and apparel stores for $160 million in cash. The proposed agreement is subject to certain closing adjustments.
Footstar, Inc. filed for Chapter 11 bankruptcy protection on March 2, 2004 and the agreement with Foot Locker will be entered into under a Bankruptcy Code Section 363 sale process. The agreement is therefore subject to approval by the Bankruptcy Court at a hearing expected to commence on April 21, 2004 and also requires approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. Foot Locker, Inc. expects to close the transaction during its second fiscal quarter.
“The agreed upon purchase of the Footaction stores is in line with our previously stated strategic priorities, including the acquisition of compatible athletic footwear and apparel retail companies,” stated Matthew D. Serra, Foot Locker, Inc.'s Chairman and Chief Executive Officer. “Foot Locker, Inc.'s strong financial position enables the Company to readily complete this cash acquisition. It is expected that the proposed acquisition will be accretive to Foot Locker, Inc.'s diluted earnings per share within the first full year of operation. We anticipate offering employment to substantially all of the Footaction store associates.”
Dale Hilpert, Chairman and Chief Executive Officer of Footstar, Inc. stated “The agreed upon transaction with Foot Locker, Inc. meets our objectives to maximize value for our stakeholders, while providing continued employment opportunities for Footaction store associates. We believe that Foot Locker, Inc.'s strong financial position enables this transaction to be completed in a timely manner.”
Banc of America Securities LLC is serving as the exclusive financial advisor to Foot Locker, Inc.