Finish Line Launched Poison Pill Plan To Prevent Hostile Takeover

According to the world clothing shoes and hats net, in this previous article, the reporter has already introduced, facing the American sports retail.

In the recession, Hilbert sports moved ahead of schedule.

Platform, hoping to achieve self-help.

Today, we are going to talk about another Finish Line, an American sports retailer.

This is a sale.

Clothing and apparel retail chains in the US.

It operates about 950 stores in the US mall and Messi stores.

Footwear sales accounted for 70% of the company's total revenue, and sportswear and apparel accounted for 30%.

In 1976, the founder of the finish line, David clapper and Alan Cohen, received 10 years' authorization, and opened a Athlete 's Foot franchise in Indianapolis, USA, announcing that they officially entered the sports retail business.

Four or five years later, the stores of two people have expanded to 10 stores.

In order to cope with the market changes and reduce the negative impact of the franchise mode, the two of them found two partners and created the brand store of the finish line.

In contrast, the Athlete 's Foot store has an average area of 1500 to 2000 square feet, mostly located in a closed field, and the outlets at the finish line are mostly 3000 to 4000 square feet.

Stock market crash

In August, CEO of Dick sporting goods said his sports retail market was in a state of panic.

Such remarks soon shocked the entire sporting goods industry.

Finishing line CEO Sam Sarto (Sam Sato) also invariably indicated that the sports shoes market is still "competitive and promotional atmosphere".

In August 28th, the finishing line decided to adopt a commonly used stockholder's rights plan called poison pill to prevent hostile takeovers.

"The Board believes that in view of the current market situation and the recent stock market situation, the initiation of shareholder equity plan is the most beneficial to the finish line and shareholders."

Compared with previously predicted low single digit growth, the finish line now expects annual same store sales to drop by 3% to 5%, while adjusted earnings per share are about 50 cents to 60 cents, much lower than the previous forecast of 1.12 US dollars to 1.23 US dollars.

According to the disclosure, the sale of the finish line in the second quarter is expected to drop to 469 million 400 thousand US dollars, down 3.3% from the same period last year, and the sales will drop by 4.6% compared with the same period last year.

As the news came out, the stock market plummeted on the second day of the finish line, and its share price fell more than 60% in 12 months.

On the same day, the stock market of other sporting goods retailers was also negatively affected.

Andrew shares fell by about 4%, while Nike dropped more than 2%, while Dick sports and Foot Locker declined more than 1%.

Hilbert sports shares fell nearly 3%, while Big 5 sporting goods company's share price dropped around 3% at around ten a.m.

"This is not surprising, because at this point, the difficult situation is clearly formed."

Randall Knig, analyst at Randal Konik, explained to clients in a recent report.

What he pointed out in particular is that Nike's business will continue to bear pressure because it relies largely on the finish line.

Poison pill plan

The end line started the poison pill plan, mainly to prevent the acquisition of Sports Direct.

As of August 22nd, Sports Direct held about 8% of the finishing line shares.

According to analysts, the British sports retailer has been looking for opportunities to increase its share in the US market.

In June 21st, Sports Direct, a UK based company, raised its stake in the finishing line from 9.2% in May 17th to 19.9%.

In June, Sports Direct held stores for about 50 Bob stores (Bob 's Store) and Dongshan sports (Eastern Mountain Sports).

According to the official website description, Sports Direct has 468 stores in the UK and operates 289 stores worldwide.

It also owns many brands such as Slazenger and Everlast.

"Sports Direct has an economic interest with many companies," said Sloan Hanna financial group in a report. "However, it only sells the put option to enhance the ownership strategy of the company with only one finish line."

In addition to the poison pill program, the finishing line also issued a second quarter earnings warning.

"According to the results and guidance of the financial results, the core business of the finish line is facing difficulties. Messi's department store is also keeping its position," Sloan Hanna financial group points out. "If it is not for the relative health of Messi's department store business, it will be difficult to achieve the expected level of income in the second quarter of 2018."

The finishing line is not the only setback in the sporting goods market.

The sports retail industry in the United States is experiencing the critical moment of price reduction, viewpoint and bankruptcy.

E-commerce giant Amazon has also become an ideal platform for consumers to buy sports equipment.

This summer, Nike has confirmed that it wants to sell some products on Amazon platform.

Acquisition crisis

Although the poison pill plan has been thrown at the finish line, it is not yet clear whether it can shake off the M & a crisis.

According to external analysis, the finishing line may soon become a sports goods discount shop.

Sam Poser, an analyst with sports shoes from Sloan Hanna financial group, believes that 75% of the finish line will be bought by Sports Direct.

He said that once acquired, the finish line may still retain its existing brand, but it will walk down the altar and become the destination of sports shoes discount.

In terms of product line layout, the finish line and Foot Locker are different.

But in a previous interview, Bozi analysis showed that Foot Locker was closer to consumers, while the finishing line was in a quagmire of declining sales, and there was no possibility of reversing in the short term.

Glenn Leon, chairman of the Glenn Lyon, said in a statement that the poison pill program "aims to ensure that the board of directors of the company can consider whether it is in the best interests of all shareholders regardless of any proposal."

In other words, the signing of the purchase agreement is not impossible.

After referring to the high-level dialogue at the finishing line, he said he thought the board was willing to talk with the buyers.

The finishing line refused to comment on this.

Although the poison pill plan is clearly designed to get rid of the fate of a hostile takeover, he said it is also conveying a signal that the finish line is open to negotiations with Sports Direct.

Once the finish line is successfully acquired, it will not only face brand restructuring, but also send Sports Direct to the top position of sporting goods retail in the United States.

More interesting reports, please pay attention to the world clothing shoes and hats net.