Skechers Investors Sue Company Executives and 3G Capital Over Alleged Undervaluation
Skechers investors have filed a class action lawsuit against the company’s executives and 3G Capital, the private equity firm that acquired the sneaker company earlier this year, alleging that the sale price was unfair. The lawsuit, filed in Delaware Chancery Court, claims that the $9.4-billion deal, which closed in September, undervalued the company and shortchanged minority shareholders.
The deal, which reflected a share price of $63 per share, was announced in March, but the company’s stock price had taken a hit due to the volatile federal tariff policy. The plaintiffs argue that the deal benefited Skechers President Michael Greenberg and other controlling shareholders, who worked closely with 3G Capital to structure the acquisition. According to the complaint, 3G Capital had initially offered $73 per share, but lowered its offer after the tariffs were announced.
Background on the Acquisition
Skechers was one of several footwear and apparel companies that spoke out against the steep import taxes imposed by the Trump administration on countries such as China and Vietnam, where many Skechers products are made. The company’s stock price fell 23% in early April after the tariffs were announced, but bounced back up 30% after the 3G Capital deal was announced. At the time, 3G Capital and Skechers said the purchase price represented a 30% premium to the company’s 15-day volume-weighted average stock price.
However, plaintiffs in the case argue that the deal was not fair to minority shareholders, who were unable to reach an early settlement with Skechers after the company made an offer that was slightly higher than the original price. Around 60 investment pools managed by various firms have filed to challenge the price of $1.3 billion worth of shares. The plaintiffs claim that Chief Executive Robert Greenberg and his son Michael, the company’s president, worked to tailor an acquisition deal that benefited them personally.
Expert Analysis and Next Steps
According to experts, the case highlights the challenges of valuing companies in uncertain market conditions. “The merger was carefully structured to allow the Greenberg stockholders to monetize a substantial amount of their personal Skechers’ holdings,” the court complaint said. The plaintiffs are seeking a higher share price, and the case is ongoing. Skechers has declined to comment on the pending legal matter.
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