Jan. 23 (Bloomberg) -- K-Swiss Inc., the money-losing athletic-footwear maker, was sued by an investor who contends the company’s shares are undervalued in a $170 million, $4.75-a-share offer from South Korean clothier E.Land World Ltd.
Directors of Westlake Village, California-based K-Swiss are duty-bound to negotiate the best possible price for the company, David Raul said in a Delaware Chancery Court complaint made public today in Wilmington.
The company’s officers and directors hold about 75 percent of the voting power and their voting agreements “essentially ensure that the proposed transaction will be approved, and pose an unreasonable and preclusive obstruction to the emergence of a superior alternative bid,” Raul claims.
K-Swiss and Seoul-based E.Land World announced the deal Jan. 16 with E.Land offering a 49 percent premium for Class A common stock at the time. The shares were unchanged at $4.71 in Nasdaq stock market trading in New York at 3:51 p.m.
Raul is asking a judge to grant the case class or group status, in behalf of all outside shareholders, and to stop the transaction under its present terms.
Tripp Sullivan, a K-Swiss spokesman, said the company had no comment on the lawsuit.
The case is Raul v. Nichols, CA8239, Delaware Chancery Court (Wilmington).
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