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Contributors: Douglas McIntyre Jon C. Ogg

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Monday, July 31, 2006

BAIT SHOP UPDATE: Foot Locker's Buyout & Who May Be Next

Stock Tickers: FL, FINL

Topics: M&A, Private Equity, Buyout, Merger, Acquisition, Foot Locker, Finish line

Foot Locker (FL) is up another 4% today as an article in Women's Wear Daily says they are clearing out inventory ahead of it selling itself to two private equity groups. The issue you have to ask is that since the street has gotten wind of this and buyout speculators have been in it, is the stock fully valued or close to it? Private equity buyers are probably not going to try to reward newer shareholders who have chased up the price, and Foot Locker executives and board members probably will not feel the need to reward last minute speculators either.

HERE is the link to the "WWD" article, but a subscription is required for the bulk of this article and we cannot post the rest because of copyright issues.

This brings up a point we have made to clients. If someone really wants to acquire Foot Locker (FL), then someone else should be looking at Finish Line (FINL) as a better buyout candidate. The ONLY real issue we have surmized in comparing the deal is that with so much private equity funding having been raised it allows the private equity firms to put more capital to work in a faster basis. We have a full comparison of the values and future strategies as well. There is still the issue of Class A and B shares, and that is something that could also require resolution.

If you would like to see the research we have compiled on this, please send an email to jonogg@gmail.com to receive this via email. This is one of the FREE Bait Shop reports we are making available, but it is only available upon request.

Jon C. Ogg
July 31, 2006
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