UPDATE 1-Finish Line says UBS concerned about Genesco

(Adds Genesco comment, stock prices)

PHILADELPHIA, Sept 14 (Reuters) - Shoe retailer Finish Line Inc. (FINL.O) said on Friday that UBS (UBSN.VX) raised concerns about the financial health of Genesco Inc (GCO.N), warning that it may terminate its agreement to fund Finish Line's $1.5 billion purchase of the shoe and hat retailer.

Finish Line said last month it would evaluate its options for the planned acquisition after Genesco posted a surprise quarterly loss. It hired Moelis Advisors, a division of Mercanti Securities LLC, as a financial and capital markets adviser after Genesco's unexpected loss.

Finish Line said Swiss bank UBS, which had agreed to finance the deal, had asked for Genesco's financial records so it could determine whether a "material adverse change" had occurred in Genesco's business.

Finish Line declined additional comment.

Under the terms of the financing agreement, UBS could walk away from financing the deal if Genesco's financial health deteriorated substantially. UBS requested that it gain "unfettered access" to review Genesco's books and financial information.

Genesco said no "material adverse effect" had occurred. The company said its shareholders will vote on Sept. 17 on the proposed takeover by Finish Line.

Analysts previously speculated that Finish Line may renegotiate the price instead of terminating the deal. Finish Line would need to prove that a major weakness or permanent change happened in Genesco's business, instead of the seasonal timing issues that Genesco cited for the weak results, an analyst with JP Morgan had said.

Genesco blamed its poor second-quarter results on the late start of many school calendars and sales-tax holidays in Texas and Florida. The company also cited a tough selling market for footwear retailers in the latest quarter, something it expects to continue into the third quarter.

Shares of Genesco have fallen 11 percent since it posted its quarterly results on Aug. 30. Genesco's stock closed on Friday at $44.53, down $1.29, or 2.8 percent. Shares of Finish Line closed at $5.37, up 43 cents, or 8.7 percent. (Reporting by Jessica Hall)