Skechers (SKX) Faces Lawsuit Over $9.4B Go-Private Deal

Skechers USA Inc. (SKX) is facing a lawsuit over its $9.4 billion buyout by private equity firm 3G Capital. A shareholder lawsuit, filed by the Key West Police Officers and Firefighters Retirement Plan, claims the footwear giant did not share enough details about the deal, causing concerns about fairness and transparency.

The lawsuit has been filed in the Los Angeles federal court. It argues that Skechers’ founder, Robert Greenberg, and his family, who hold about 60% of the company’s voting power, controlled the sales process and limited bidding to a single buyer. This, according to the plaintiff, deprived minority shareholders of a fair bidding process.

Also, the complaint states that Skechers has not made necessary filings with the U.S. Securities and Exchange Commission (SEC), which are required for publicly traded companies going private. The pension fund seeks to prevent the deal from closing until full disclosures are made.

Lawsuit Alleges Lower Price for Skechers Shareholders

The lawsuit mentions a Reuters report where a Needham analyst called the buyout “very surprising” since Skechers has always been family-run. The report also suggests that the Greenbergs chose 3G Capital because of their long-standing relationship, possibly skipping a wider bidding process.

Further, the buyout values Skechers at $63 per share in cash, which is 20% below its 52-week high of $78.82, reached on January 30. The lawsuit suggests that the lack of an auction process may have resulted in a lower valuation for shareholders.

Is SKX a Good Stock to Buy?

Turning to Wall Street, SKX stock has a Moderate Buy consensus rating based on five Buys and 10 Holds assigned in the last three months. At $61, the average Skechers stock price target implies a 1.68% downside potential.

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