Skechers shareholder sues company for details on $9.4B buyout.

A Skechers shareholder has sued the company for more information on its $9.4B buyout by private equity firm 3G Capital. The shareholder claims that founder Robert Greenberg controlled the sales process to a single bidder, depriving minority shareholders of a legitimate bidding process. The lawsuit raises concerns about the fairness of the buyout and the potential benefits for the Greenberg family.

A shareholder of Skechers (SKX, Financial) has initiated legal action against the company, seeking further details about its $9.4 billion acquisition by 3G Capital, a private equity firm. The lawsuit, filed in a Los Angeles federal court, alleges that Skechers' founder, Robert Greenberg, and his family may have manipulated the sales process to ensure a deal with only one bidder, potentially excluding minority shareholders from a fair and open bidding process [1].

The lawsuit comes amidst a backdrop of Wall Street analysts' varying opinions on the company's prospects. Based on the one-year price targets offered by 13 analysts, the average target price for Skechers USA Inc (SKX, Financial) is $62.24, with a high estimate of $65.06 and a low estimate of $58.00. This implies an average upside of 0.31% from the current price of $62.04 [1]. Additionally, the consensus recommendation from 17 brokerage firms is a "Hold" status, indicating a cautious outlook [1].

The lawsuit also raises questions about the fairness of the buyout, as the Greenberg family holds about 60% of Skechers' voting power. According to a complaint filed by the Florida-based Key West Police Officers & Firefighters Retirement Plan, the buyout should not close until Skechers makes required disclosures to help shareholders decide if the terms are fair [2]. The complaint cites a Reuters article where Needham analyst Tom Nikic called the buyout "very surprising" because Skechers was considered a family business [2].

The lawsuit is not unprecedented; many large U.S. corporate mergers are challenged in court. Such lawsuits often end with defendants paying legal fees to plaintiffs' lawyers, and plaintiffs recovering nominal payouts or nothing [2]. However, the lawsuit could potentially delay the buyout process and introduce additional scrutiny into the deal's terms.

The buyout values Skechers at $63 per share in cash, which is 20% below its 52-week high of $78.82 set on January 30 [2]. This valuation comes amidst broader market pressures, including U.S. President Donald Trump's tariffs and the company's withdrawal of full-year financial guidance in April due to the impact of tariffs on its Chinese operations [2].

References:
[1] https://www.gurufocus.com/news/2900327/skechers-skx-faces-lawsuit-over-94b-buyout-deal-skx-stock-news
[2] https://ca.fashionnetwork.com/news/Skechers-shareholder-sues-footwear-maker-for-details-on-9-4-billion-3g-buyout,1736019.html