The stock of Sketchers (NYSE: SKX) is surging in Monday’s trading following an announcement that the company is set to be acquired. The footwear specialist’s share price was up 24.5% as of 1:45 p.m. ET today amid the backdrop of a 0.3% decline for the S&P 500 index.
Before the market opened this morning, Sketchers published a press release announcing that it has reached a deal to be bought out by 3G Capital in a $9 billion deal. Because the shareholders with a majority stake in the business have already approved the transaction, the deal is almost certain to go through, and the stock is soaring toward its buyout valuation today.
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Sketchers soars on a $9 billion buyout
With 3G Capital’s $9 billion buyout, Sketchers shareholders will have the choice between $63 per share in cash or $57 per share in cash plus a nontransferable share in a new private holding company that will house the footwear business. The acquisition price represents a 30% premium relative to the stock’s average price over the previous 15 days of trading.
Once it’s taken private, Sketchers will continue to be run by CEO Robert Greenberg and other members of the existing management team.
Is Sketchers stock a buy now?
On the heels of disappointing quarterly results and warnings that tariffs could create big headwinds for the business, the buyout announcement looks like a big win for shareholders who held positions heading into today’s opening. With the stock trading at roughly $61.50 per share as of this writing, investors who buy Sketchers stock at today’s prices would see upside of just 2.4% if they were to hold the shares until the buyout is completed, so it’s probably not worth getting in at this point.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool recommends Skechers U.s.a. The Motley Fool has a disclosure policy.
