Foot Locker Stock Jumps on Potential Dick’s Deal
Foot Locker Inc. saw its shares skyrocket by a whopping 70% in after-hours trading Wednesday. The surge came after a report from the Wall Street Journal that Dick’s Sporting Goods Inc. is seriously considering buying the company.
A Potential Billion-Dollar Deal
According to the report, Dick’s could value Foot Locker at around $2.3 billion, a significant increase from Foot Locker’s current market value of $1.2 billion. That’s nearly a 100% premium!
It’s important to note that the deal isn’t finalized yet. Sources familiar with the situation told the Wall Street Journal that talks are still ongoing.
Foot Locker’s Performance
Foot Locker’s stock price had actually dipped over 3% during regular trading on Wednesday, closing at $12.87. This follows three consecutive years of declining revenue for the company, which reached less than $8 billion in the last fiscal year. The company has been working hard to boost sales by renovating stores and strengthening its relationship with Nike, but the current economic climate, with slowing discretionary spending, has presented challenges.
Foot Locker’s India Connection
Foot Locker has a presence in India through partnerships with companies like Metro Brands and FSN E-commerce Ventures (the parent company of Nykaa). However, Metro Brands has expressed caution about expanding Foot Locker’s store network in India due to uncertainties surrounding Bureau of Indian Standards (BIS) regulations.
What This Means
If the acquisition goes through, Dick’s Sporting Goods would be taking on a company that is still struggling to regain its footing. As Neil Saunders, managing director at GlobalData, pointed out, “The comeback is not yet fully in play.” Dick’s stock price also took a hit, dropping 6% in after-hours trading following the news.
