Why are investors trying to challenge Skecher’s acquisition?

Skechers investors are suing the company’s executives and Skechers owner 3G Capital over what they say was an unfair sales price in the acquisition earlier this year.

3G Capital took the Manhattan Beach-based sneaker company private in a $9.4 billion deal that closed in September and reflected a price of $63 per share.

In a class-action complaint filed this month in Delaware Chancery Court, hedge funds and other big sketch investors accused the company and 3G Capital of arranging non-independent deals that shorted minority shareholders.

The complaint said the deal undervalued the company because its shares were being hit by the volatile federal tariff policy. According to the plaintiffs, the deal also benefited Skechers president Michael Greenberg and other controlling shareholders.

Bloomberg reported this week that plaintiffs seeking a higher share price were unable to reach an initial settlement with Skechers after the company offered a slightly higher than original price.

According to court documents, 3G Capital had offered a price of $73 per share in March this year, but reduced its offer after Trump’s tariff “Freedom Day” on April 2.

Investors are now pressing ahead with the case, according to Bloomberg.

Skechers said it would not comment on pending legal matters.

Skechers was one of several shoe and apparel companies that sounded the alarm when Trump approved import taxes on countries including China and Vietnam, where most of Skechers’ products are made.

The company’s stock price fell 23% after the tariffs were announced in early April. Shares rebounded 30% after the 3G Capital deal was announced.

At the time of the acquisition, 3G Capital and Sketchers said the purchase price represented a 30% premium to the company’s 15-day volume-weighted average stock price.

After the deal closed, about 60 investment pools managed by various companies to challenge the $1.3 billion share price.

Plaintiffs in the suit say CEO Robert Greenberg, along with his son Michael, the company’s chairman, worked closely with 3G Capital to craft an acquisition deal that worked for them amid the tariff turmoil.

“The settlement was carefully crafted to allow Greenberg’s stockholders to make a substantial profit from their private equity holdings,” the court complaint said.