Skechers investors are suing company executives and Skechers owner 3G Capital over what they say was an unfair sales price in an acquisition earlier this year.
3G Capital took the Manhattan Beach-based sneaker company public in a $9.4 billion deal that closed in September and reflected a stock price of $63 per share.
In a class-action lawsuit filed this month in Delaware Court of Chancery, hedge funds and other large investors in Skechers accused the company and 3G Capital of arranging a non-independent deal that defrauded minority shareholders.
The deal undervalued the company as its stock was taking a beating due to a volatile federal tariff policy, according to the complaint. The deal also benefited Skechers Chairman Michael Greenberg and other majority shareholders, according to the plaintiffs.
Plaintiffs seeking a higher share price were unable to reach an early settlement with Skechers after the company made an offer slightly higher than the original price, Bloomberg reported this week.
According to court documents, 3G Capital had offered a price of $73 per share in March of this year, but lowered its offer after Trump's tariff “release day” on April 2.
According to Bloomberg, investors are moving forward with the case.
Skechers said it would not comment on pending legal matters.
Skechers was one of many shoe and apparel companies that sounded the alarm when Trump approved high taxes on imports in countries like China and Vietnam, where many Skechers products are manufactured.
The company's stock price fell 23% in early April after the tariffs were announced. Shares rallied 30% after the deal with 3G Capital was announced.
At the time of the acquisition, 3G Capital and Skechers said the purchase price represented a 30% premium to the company's 15-day volume-weighted average share price.
After the deal was closed, around 60 investment groups managed by various companies came forward to challenge the $1.3 billion share price.
The plaintiffs in the case say that CEO Robert Greenberg, along with his son Michael, the company's president, worked closely with 3G Capital to design an acquisition deal that worked for them amid the tariff chaos.
“The merger was carefully structured to allow Greenberg shareholders to monetize a substantial amount of their personal holdings in Skechers,” the court complaint said.
