Genesco reaches the end with Finish Line; Leucadia picks AmeriCredit board members; TierOne deal stuck

By Aaron Hochman-Zimmerman

New York, March 4 - A slow deal day was punctuated by a late equity rally on the back of positive earnings and a possible deal for the monolines.

"This bond insurance thing is trying to unfold here," said Paul Martin, chief investment officer of Martin Capital, about reports of progress for a deal to save Ambac Financial Group Inc.

"That was the most significant event," he said.

"That's what turned the market around today," he said.

Meanwhile, Genesco Inc. finalized its outro from its merger deal with The Finish Line Inc. and UBS.

Leucadia National Corp. successfully placed the two newest members of AmeriCredit Corp.'s board of directors, but it capped the amount of AmeriCredit shares it can buy.

TierOne Corp.'s acquisition by CapitalSource Inc. hit speed bumps in the form of the credit crisis as evidenced by its earnings report which was released on Monday.

United Technologies Corp. stayed hot on the trail of Diebold Inc., but market sources differed over the proper value of the ATM manufacturer.

The Dow Jones Industrial Average ended down by just 45.10, or 0.37%, at 12,213.80, while the Nasdaq Composite Index managed to end up by 1.68, or 0.07%, to close at 2,260.28.

The S&P 500 slipped 4.59, or 0.34%, to close at 1,326.75.

Leucadia picks two for AmeriCredit

Leucadia National Corp. (NYSE: LUK), which has been slowly buying up to 25% of AmeriCredit Corp. (NYSE: ACF), selected AmeriCredit's two recent additions to the board of directors.

Shares of Leucadia dropped $1.32 or 2.90% to $44.23 while shares of AmeriCredit were lower by $0.45 or 3.10% to end at $14.05 on Tuesday.

"We're delighted to add professionals of this caliber to our board of directors," said AmeriCredit chairman Clifton Morris in a press release.

"They are both well respected, accomplished leaders with outstanding experience, and I'm confident that our company and shareholders will benefit greatly from their counsel and knowledge," he said.

Leucadia also intends to limit its holding to 29%, which will drive AmeriCredit stock down, a market source said.

At what price Diebold?

Shares of United Technologies Corp. (NYSE: UTX) were off by $0.50 or 0.72% to finish at $68.90 as it continues on the heels of Diebold Inc. (NYSE: DBD).

Diebold stock to fell $1.16 or 2.99% to close the day at $37.68.

Many market watchers have formed differing opinions about the true worth of Diebold, but the recently rejected offer from United Technologies is $3 billion or $40 per share.

TierOne stuck in the mud

TierOne (Nasdaq: TONE) shares fell by $1.03 or 7.46% to close at $12.78 as its deal with Capital Source (NYSE: CSE) ground to a halt, according to a market source.

CapitalSource's (NYSE: CSE) stock also dropped by $0.85 or 5.42% to end the session at $14.83.

TierOne announced a fourth quarter loss of $18 million on Monday, according to a company press release.

During the same period of 2006, the Lincoln, Neb.-based bank posted an $11 million profit.

TierOne suffered an annual loss of $12 million during 2007.

"Unprecedented pressures on the nation's equity, housing, credit and economic markets in 2007 have significantly impacted much of the financial sector and TierOne has not been immune to these issues," said chairman and chief executive officer Gilbert Lundstrom, in the press release.

"We have taken a number of steps to address these challenges and will continue to adjust our business model as the current economic conditions warrant," he said.

"Everyone's licking their own credit loses so they are afraid to take on any other companies," a market source said.

"On the other hand, CapitalSource can really use the cheap financing from the bank's deposits," the source said.

Genesco deal reaches Finish Line

Genesco Inc. (NYSE: GCO) shares were lower by $1.47 or 5.93% to finish at $23.30 as it agreed with The Finish Line Inc. (Nasdaq: FINL) to terminate their merger agreement, according to a press release.

Finish line stock jumped $0.32 or 8.06% to end the day at $4.29.

Financing from UBS will also be terminated.

According to the termination agreement, UBS and Finish Line will pay Genesco $175 million.

UBS will pay $136 million and Finish Line will pay $39 million in cash.

Genesco will also receive 12% of the total post-issuance outstanding shares of Finish Line's common stock.

The payment is expected on Friday.

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