Dive Brief:
- The Skechers and 3G Capital merger was granted antitrust clearance on Tuesday, according to a notice from the Federal Trade Commission.
- However on Monday, a shareholder group that is suing the footwear giant filed a motion asking Skechers to refrain from closing the deal.
- The go-private deal with 3G, valued at about $9.4 billion, is expected to close in Q3. However, the shareholder lawsuit could delay the process.
Dive Insight:
In a complaint filed in May, the Key West Police Officers & Firefighters Retirement Plan said Skechers violated federal securities law by failing to file the appropriate paperwork on the merger with the Securities and Exchange Commission.
The shareholder group claims that it needs this paperwork, a Schedule 13E-3, in order to make a decision on its stock payout option at the close of the deal. Schedule 13E-3s include information on the purposes of a transaction, whether alternatives were considered and whether the transaction is fair to unaffiliated shareholders.
The group’s motion this week asks the court to prevent Skechers executives from enforcing a deadline on shareholders’ selection of a stock payout option until the document is filed.
Skechers and its attorneys will have 30 days to respond to the initial complaint after a judge rules on the motion. A hearing on the case is scheduled for July 21 in Los Angeles.
In addition to Skechers, the lawsuit was brought against Skechers executives Robert and Michael Greenberg individually.
Stockholder lawsuits are common in public company acquisitions, and in situations where company management is involved, the issues are heightened, said Eric Simonson, partner at law firm Greenspoon Marder in the corporate and business practice group.
In lawsuits such as this, parties of the deal have strong incentive to settle these issues in a timely manner, he added.
“If the plaintiffs can allege a credible narrative, even if not fully supported by evidence, the litigation may not be easily dismissed, resulting in large costs and delays of litigation that can put a deal in jeopardy,” Simonson said in a statement.
