Sports Direct is likely planning to take over Finish Line, analysts say
By Tonya Garcia, MarketWatch
Analysts say the poison pill Finish Line issued last month was a negotiating tactic
Susquehanna Financial Group analysts led by Sam Poser believe reports that British retailer Sports Direct is in talks to buy Finish Line Inc. are "accurate."
As evidence, Susquehanna says Sports Direct has been building an interest in Finish Line (FINL) since the end of March, acquiring about 8% beneficial ownership of the sports retailer in mid-August by being assigned shares related to the expiration of a short put position, or an option to sell.
Susquehanna estimates that Sports Direct also has about a 21% economic interest in Finish Line, acquired through contracts for differences, or CFDs, a type of derivative, with ETX Capital acting as counterparty.
At the end of August, Finish Line issued a "poison pill" (http://www.marketwatch.com/story/finish-lines-poison-pill-meant-to-beat-back-a-takeover-from-uks-sports-direct-2017-08-29) intended to beat back a takeover effort from Sports Direct, which already owns brands like Everlast and Slazenger. In June, Sports Direct completed an acquisition of 50 Bob's Stores and Eastern Mountain Sports outdoor adventure schools, an acquisition that Sports Direct executives have said puts them in a position to expand in the U.S.
Last Friday, Finish Line reported a second-quarter earnings miss (http://www.marketwatch.com/story/finish-lines-adjusted-profit-misses-expectations-shares-fall-2017-09-22) after warning about profit and sales (http://www.marketwatch.com/story/finish-line-slashes-forecast-adopts-poison-pill-2017-08-28) on August 28.
Finish Line shares are up 47.1% for the past month, and up 7.3% in Friday trading.