The Finish Line, Inc has received and released excerpts from two letters from UBS Loan Finance LLC and UBS Securities LLC, which have also been provided to Genesco Inc.  UBS had previously provided FINL with a commitment letter regarding financing for its acquisition of Genesco, but may be getting a bit anxious as it looks to sell all or a portion of the financing in the midst of a credit crunch and may be looking at GCO’s less than stellar Q2 results as an out for the deal.

In a letter dated September 11, UBS states, “We hereby notify you that we reserve all rights with respect to our obligation to complete the financings as outlined under the commitment letter. While we will continue to pursue this matter in good faith, we are extremely concerned about the apparent deteriorating financial position of [Genesco]. We are continuing to actively monitor this situation, and look forward to your continued cooperation.”

The note continues, “[O]ur agreement to perform under the Commitment Letter may be terminated if a Material Adverse Effect has occurred with respect to Genesco.  As of today, we are not yet satisfied that Genesco has not experienced a Material Adverse Effect.”

UBS requested that Finish Line cause Genesco to grant an expert retained by UBS unfettered access to Genesco's books. Finish Line stated that it does not intend to make further comments at this time. 
Genesco, Inc. did have a few comments of their own regarding the UBS letter and FINL's subsequent press release on Friday afternoon.

In response to The Finish Line's announcement, Genesco Inc. issued their own release stating that it “reiterates that no 'material adverse effect' under the previously announced merger agreement with Finish Line has occurred with respect to Genesco.”  Genesco went on to say that its special shareholder meeting to consider and approve the proposed merger with The Finish Line is scheduled for Monday, Sept. 17.

FINL said last month it would evaluate its options for the planned acquisition after Genesco posted a surprise quarterly loss. The retailer has hired Moelis Advisors, a division of Mercanti Securities LLC, as a financial and capital markets adviser after Genesco's unexpected loss.