Manhattan Beach, Calif.-based Skechers said in a statement released Wednesday after the close of the stock market that it has made a proposal to buy Heelys for $5.25 a share in cash, or $142.8 million, based on Heelys shares outstanding. Skechers said the offer represents an 8 percent premium to Heelys’ stock price on Aug. 12, and said it would also consider a mix of cash and stock for the deal.
In Wednesday after-hours trading, Heelys’ stock shot up 12 percent from its close of $4.87. Skechers stock rose a little more than 1 percent from its Wednesday close of $19.94.
In a letter dated Aug. 13 from Skechers Chairman and CEO Robert Greenberg to Heelys Chairman Gary Martin, Greenberg revealed that beginning in December 2007, Skechers has “had numerous discussions with you exploring the potential acquisition of Heelys Inc.” He said Skechers had formally proposed an acquisition on May 28, which was subsequently declined by Heelys’ board.
The CEO said he pushed the news of his firm’s interest in the acquisition to the public market, “given Heelys’ failure to provide a positive response to our May 28 proposal.” He added, “We thought it would be best for both companies, and our respective shareholders, to publicly announce this proposal and our interest in pursuing this transaction.”
Skechers also revealed its May 28 letter, in which it had initially bid on Heelys. In that letter, Greenberg noted that his firm’s interest dates back nearly two years. “Skechers carefully considered a potential transaction with Heelys prior to its December 2006 initial public offering,” he wrote.
The letter also notes that Heelys approached Skechers about forming a “strategic partnership” in December 2007. Skechers then showed interest in acquiring Heelys in an April letter, where it requested information in order to evaluate a potential acquisition.